Question: 1 Afcon Ltd uses a direct material (Product code: RM 005) in the production of their finished product. The following transactions took place during the

1Afcon Ltd uses a direct material (Product code: RM 005) in the production of their finished product.

The following transactions took place during the month of February 2020:

01/02/2020Balance of 50 units at R20.00 each.

10/02/2020Purchased 75 units at R25.00 each from Reach Ltd on credit.

19/02/2020Purchased 25 units at R27.50 each for cash.

22/02/2020Issued 80 units into production.

25 /02/2020Returned 10 units bought on the 10/02/2020, to Reach Ltd.

28/02/2020Received 5 units back from production.

Required:

Compile a stock ledger card forRM 005using theFIFOinventory valuation method.(8)

3.2The following information relates to an article manufactured by Betok Ltd:

Annual requirement:32 400 units

Cost per order:R96

Carrying cost per unit:24%

Cost per unit:R18

Required:

Calculate the EOQ(2)

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