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The market demand for PSG's product is 2 000 units per month. Sales are spread evenly throughout the year. The cost price of a unit
The market demand for PSG's product is 2 000 units per month. Sales are spread evenly throughout the year. The cost price of a unit is R10 each and PSG sells the product at R15 each. Expenditure associated with inventory is as follows: Ordering cost R25 per order Interest rate 20 % per annum Holding costs R48 per unit Delivery time 2 weeks to 4 weeks Weekly demand 400 - 600 units Required: Calculate the following: 3.1. Economic order quantity 3.2. Re-order point 3.3. Maximum inventory holding 3.4. Minimum inventory holding [3 marks] [3 marks] [2 marks] [2 marks] Question 4 (30 Marks) [8 Marks] [12 Marks] 4.1. What are the principles and ethical responsibilities that are applicable to professional accountants? 4.2. Critically analyse the differences between financial accounting and management accounting 4.3. List FIVE activities that are performed in costing systems 4.4. Explain why planning, decision-making and controlling are key responsibilities of management in any organisation. [5 marks] [5 marks]
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