QUESTION $2$

$(20$ MARKS$)$

$2\mathrm{.}1$

REQUIRED

Use the information given below to calculate the net value of issues to production for May $2023$ and value of closing inventory as at $31$ May $2023$ using the following methods of inventory valuation:

$2\mathrm{.}1\mathrm{.}1$

First$-$in$-$first$-$out

$(5$ marks$)$

$2\mathrm{.}1\mathrm{.}2$

Last$-$in$-$first$-$out

$(5$ marks$)$

$2\mathrm{.}1\mathrm{.}3$

Weighted average cost. $($Express the average cost per unit in rands and cents.$)$

$(5$ marks$)$

INFORMATION

The following information for May $2023$ was extracted from the records of Kens Limited, a manufacturing company, for a component used in production:

Date

Transaction details

Opening inventory:

$01$

$3000$ units at R$17$ each

Purchased from a supplier:

$03$

$46000$ units at R$18$ each

$16$

$37000$ units at R$19$ each

$23$

$15000$ units at R$20$ each

Returned to the supplier:

$04$

$1000$ damaged units $($purchased $03$ May$)$

Transferred to the production department:

$80000$ units during May $2023$

$2\mathrm{.}2$

REQUIRED

Use the information given below to calculate the quantity that will minimise the total ordering and storage costs during $2024.$

$(5$ marks$)$

INFORMATION

Kip Enterprises intends purchasing $2000$ units of product Yogo per week during $2024$ at R$52$ per unit. The following additional costs are incurred:

Ordering cost

R$25$ per order

Stockholding cost

$10\%$ of the unit purchase price