Problem 1 The following data about Maxwell Company is given for the month of August. August 1 Inventory 800 units at P10 12 Purchase 1,000 units at P12 14 Purchase 500 units at P11.50 16 Issue 800 units 18 Purchase 600 units at P15 20 Issue 500 units 25 Purchase 400 units at P14 28 Issue 800 units Required: Using FIFO method of costing materials, how much is the cost of ending inventory for August? How much is the cost of materials issued or used for production? How much is the total goods available for sale?
Problem 1
The following data about Maxwell Company is given for the month of August.
August 1 Inventory 800 units at P10
12 Purchase 1,000 units at P12
14 Purchase 500 units at P11.50
16 Issue 800 units
18 Purchase 600 units at P15
20 Issue 500 units
25 Purchase 400 units at P14
28 Issue 800 units
Required:
- Using FIFO method of costing materials, how much is the cost of ending inventory for August?
- How much is the cost of materials issued or used for production?
- How much is the total goods available for sale?
PROBLEM 2
Using the data in problem 1 above and using weighted average, compute for
- Weighted average unit cost
- Cost of ending inventory
- Cost of materials issued
- Using Moving average method, compute for
- Cost of ending inventory
- Cost of materials issued
PROBLEM 3
Use both FIFO and WEIGHTED AVE in computing the required balances:
June 1 Balance 800 @ P4.00
June 3 Issued 50
June 5 Purchased 300 @ P4.50
June 6 Issued 250
June 15 Issued 400
June 18 Purchased 300 @ P5.00
June 25 Issued 100
- Using FIFO method compute for the cost of
- Inventory Value
- Materials Issued
- Using average method compute for the cost of
- Inventory Value
- Materials Issued
PROBLEM 4
The following information pertains to CACHING Corporation’s Material X:
Annual Usage 25,200 units
Working days per year 360 days
Normal lead time in working days 30 days
Safety Stock 1,050 units
The maximum lead time in working days and the reorder point for Material X are
PROBLEM 5
Using the EOQ Model, Tokyo Company computed the economic order quantity for one of the materials it uses in its production to be 4,000 units. The Company maintains safety stock of 300 units. The quarterly demand for the material is 10,000 units. The order cost is 200 per order. The purchase price of the material is P4. The annual Inventory carrying cost is equal to 25% of the purchase price.
- What is the annual inventory carrying cost?
- The total inventory order cost per year is
PROBLEM 6
The following information pertains to AAA Manufacturing Company’s Product X:
Annual Demand 33,750 units
Annual cost to hold one unit of inventory P15
Setup cost (or the cost to initiate a production run P500
Beginning inventory of Product X 0
At present, the company produces 2,250 units of Product X per production run, for a total of 15 production runs per year. The Company is considering to use the EOQ model to determine the economic lot size and the number of production runs that will minimize the total inventory carrying cost and setup cost for Product X.
- At present, the company’s total annual inventory costs is
- If the EOQ model is used, the economic lot size is
- If the EOQ model is used, the number of production runs should be
- If the EOQ model is used, the total annual inventory costs, compared with that under present system, will increase (decrease) by
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