QUESTION 1

Roel Bro. has been buying a given item in lots of 900 units, which is three months supply. The cost per unit is $12 and the order cost is $16 per order and the carrying cost is 25%.

Required: How much can Roel Bro. save per year by buying in most economical quantities as compared to the 900 units?

Show this by comparing the economic order quantity, ordering cost, holding cost, total inventory management cost calculated and that of the 900 units. (13 marks)

QUESTION 2

The overheads of a manufacturing company were $250,000 for a specific period. Total output was 50,000 units. The following information was also provided:

Material cost 500,000

Number of labour hours 25,000

Labour cost 125,000

Number of machine hours 20,000

Standard hours 100,000

Calculate the overhead absorption rates by using different absorption methods applicable

(25 marks)

QUESTION 3

The following information is available for a manufacturing company

Total overhead $600,000

Total direct wages $480,000

Total direct material cost $500,000

Direct labour hours 75,000

Direct machine hours 750,000

Calculate the applicable overhead absorption rates (25 marks)

QUESTION 1 Roel Bro. has been buying a given item in lots of 900 units, which is three months supply. The cost per unit is $12 and the order cost is $16 per order and the carrying cost is 25%. Required: How much can Roel Bro. save per year by buying in most economical quantities as compared to the 900 units? Show this by comparing the economic order quantity, ordering cost, holding cost, total inventory management cost calculated and that of the 900 units. (13 marks) QUESTION 2 The overheads of a manufacturing company were $250,000 for a specific period. Total output was 50,000 units. The following information was also provided: Material cost 500,000 Number of labour hours 25,000 Labour cost 125,000 Number of machine hours 20.000 Standard hours 100,000 Calculate the overhead absorption rates by using different absorption methods applicable (25 marks) QUESTION 3 The following information is available for a manufacturing company Total overhead $600,000 Total direct wages $480,000 Total direct material cost $500,000 Direct labour hours 75,000 Direct machine hours 750.000 Calculate the applicable overhead absorption rates (25 marks)