Question
In: Accounting
A large plant in Kansas produces edgers. The following information relates to its production. Average...
- A large plant in Kansas produces edgers. The following information relates to its production.
Average demand for edgers: 720 per day
Maximum demand for edgers: 780 per day
Minimum demand for edgers: 650 per day
Unit carrying cost: $4
Holding Cost: $10
Annual Demand: 180,000 units
Lead Time: 20 - 22 days
Calculate:
- The minimum stock level ( 2 marks)
- Maximum stock level
- Re-order level
- EOQ
- Explain to a store owner the meaning of the EOQ and minimum stock level figures calculated above.
- The following information relates to QP Ltd. for the year 2014. Opening stock for the period was 350 units valued at $1.50 each.
Bought Sold
January 5 30 units @ $2.00 each January 3 220 units @ $5.00
January 6 200 units @ $3.00 each January 8 180 units @$ 5.50
January 10 50 units @ $3.25 each January 20 200 units @$6.00
January 15 59 units @ $4.00 each January 25 70 units @ $6.00
January 17 68 units @ $3.75 each January 30 195 units @ $6.50
January 27 150 units @ $4.10 each
Required: Calculate closing stock using:
- First-in-first-out method (FIFO) (6 ½ marks)
- Average cost method (AVCO) ( 6 ½ marks)
- Prepare the trading account using FIFO and AVCO to determine gross profit
Solutions
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ekkarill92 answered 1 year agoRelated Solutions
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