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Question 2. A company uses FIFO inventory pricing and has a high level of inventory turnover. In a period of rising prices the closing
Question 2. A company uses FIFO inventory pricing and has a high level of inventory turnover. In a period of rising prices the closing inventory valuation is a. Close to current purchase prices b. Based on the prices of the first item received c. Much lower than current purchase prices d. Lower than LIFO inventory pricing were used (II). The following data relates to an item of raw materials Cost of the raw material 2 MARKS K10 per unit Usage per-day 100 units Minimum lead time 20 days Maximum lead time 30 days 30 X 100 Cost of ordering material Inventory holding cost Working days per annum Required: K400 per order 10% of the cost of raw materials 240 a. Calculate the reorder level b. Calculate the economic order quantity EOQ Question 3 The budget for year for Shireoaks feeds limited was 4 MARKS BEP M 2 GS 75 Output and sales 50,000 tonnes Selling price per tonne K 75 Variable cost per tonne K 40 SP- 6208 1000 Fixed cost K 650 000 Required ver 0.04k. SP= 0.075 a. Calculate the break-even point in units and the margin of safety b. Calculate the break-even point in sales value c. Draft a statement to show profit for the year d. Draw a traditional CVP analysis chart and the contribution chart clearing showing loss area, profit region, contribution region, Bep in units and value. e. Differentiate between the traditional chart and contribution chart. 8 MARKS
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