SECTION A [30 MARKS] Answer ALL the questions in this section. QUESTION ONE 1.1 Calculate the economic order quantity (EOQ) per annum. (5 marks) Economic order quantity Startrek Secondary School purchases 700 maths sets per annum. The cost of each math set is R80. Each set is sold for R100. The cost of placing a single order is R45. The holding cost is 11% of the unit purchase price. 1.2 Calculate the value of closing inventory using the Weighted average cost inventory valuation method (5 marks) Inventory valuation The following information concerning blankets appeared in the journal of Casio Traders for the month of September 2022:

DATE	DETAILS	UNITS	COST
1	OPENING INVENTORY	20	R85
7	PURCHASES	23	R90
16	PURCHASES	33	R95
25	PURCHASES	18	R100
31	SALES FOR THE MONTH	69

QUESTION TWO

Read the case study below and answer the questions that follow. Hendry Limited produces a mini-kitchen called Town Cook, which is enjoying extensive popularity amongst young children. The following data is available for the month:

SELLING PRICE PER UNIT	R116
UNITS IN OPENING INVENTORY	600
UNITS MANUFACTURED	2550
UNITS SOLD	3050
UNITS IN CLOSING INVENTORY	100
VARIABLE COST PER UNIT
DIRECT MATERIAL	R12.00
DIRECT LABOUR	R50.00
VARIABLE MANUFACTURING OVERHEAD	R6.50
VARIABLE SELLING AND ADMINISTRATIVE	R10.00
FIXED COST:
FIXED MANUFACTURING OVERHEAD	R81000
FIXED SELLING AND ADMINISTRATIVE	R19000

The company produces the same number of units every month, although the sales in units vary from month to month. The companys variable costs per unit and total fixed costs have been constant from month to month. (where applicable, round off amounts to two decimal places)

2.1 Calculate the unit product cost for the month under marginal costing. (3 marks) 2.2 Calculate the unit product cost for the month under absorption costing (3 marks) 2.3 Prepare an income statement for the month using the absorption costing method. (7 marks) 2.4 Prepare an income statement for the month using the Marginal costing method. (7 marks