QUESTION $2$

$(20$ Marks$)$

$2\mathrm{.}1$

REQUIRED

Use the information given below to calculate the quantity to order each time that will incur the lowest amount of holding and ordering costs.

$(5$ Marks$)$

INFORMATION

Teeshack Traders sells T$-$shirts. It purchases $2500$ T$-$shirts per year from a supplier. The T$-$shirts are purchased at R$40$ each. The holding costs amounts to $2\mathrm{.}5\%$ of the purchase price, and it costs R$32$ to place an order.

$2\mathrm{.}2$

REQUIRED

Calculate the value of closing inventory as at $31$ December $2024$ and value issues to production during December $2024$ using the following methods of inventory valuation:

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

$(5$ Marks$)$

$2\mathrm{.}2\mathrm{.}2$ Weighted average cost $($with the weighted average cost per unit expressed in rands and cents$)$

$(5$ Marks$)$

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

$(5$ Marks$)$

INFORMATION

The following transactions of Prestige Manufacturers took place during December $2024$ in respect of a component used in production:

$\backslash$table$[[$Dec$,$Transactions$],[01,$Opening inventory,$1400$ units @ R$20$ per unit$],[11,$Purchased from a supplier,$8000$ units @ R$22$ per unit$],[12,$Returned to the supplier $($see $11$th$),400$ units$],[20,$Purchased from a supplier,$1000$ units @ R$23$ per unit$],[31,$Issued to production during December,$8200$ units$]]$