QUESTION ONE (a) RANSEY who runs a food joint uses two types of raw materials, cassava and plantain in preparing food for is customers. Information on the materials is given below: Maximum consumption 7,000kgs per month Minimum consumption 3,000kgs per month Re-order quantity: Cassava 8,000kgs per month Plantain 6,000kgs per month Lead time: Cassava 2-4months Plantain 1-3months Required:

Calculate

i. Re-order level

ii. Minimum stock level

iii. Maximum stock level

iv. Average stock level

(b) i. List five functions of a store keeper ii. List five advantages of centralized stores and five disadvantages of decentralized stores. iii. What is stock-taking? iv. Briefly explain periodic stock-taking and continuous stock-taking with two advantages of each

(c) i. State four advantages of the FIFO method of pricing materials and four disadvantages of the LIFO method of pricing materials ii. State two disadvantages of the standard price method of pricing materials and two advantages of the LIFO method of pricing materials

(d) i. The elements of cost are the components of the total cost of a particular product or service. Briefly explain the three elements of cost ii. Distinguish between prime cost and overheads

(e) i. State three functions and two limitations of cost accounting ii. What is inventory or stock control? iii. The overall objective of inventory control is to minimize, in total, the costs associated with inventory. Indicate the three groups of costs associated with inventory control

(f) Indicate four costs associated with carrying or holding inventory, four costs associated with being without stock (stock-out) and two costs associated with the ordering of inventory.