Udesh Regular

For CA Intermediate

Cost and
ManagementAccounting
Material Jasmeet Sir

Subject: ............ .........................................................................................................................

Material Cost
Chapter Name: .........................................................................................................................
2
03
Lecture No.: .............................................................................................................................
 Topics to be covered
Foo
*

Produce
*
oveshons
 Economic Order
Ab
Quantity
Order Size => Overall Material cost - Minimum

too= A Annual Rear,

=

of
ordering lost
per order

I:
Corrying lostqu
p.a

Material Durch,
cost--3 losta
ordering losta carrying lost

Ordering lostto No.

oforders xordering cost
per order

carrying last -
as x
carrying lost
pupa

Derivation
of formula ofGod (concept
& 200
ordering lost
carrying cost
=

-
-

of rex
No. orders x
0
=

A X 0 - ROO XL
-

Evo 2
 =
poo
x2=
roo:
Analysis ofDiscountoffer
Puch price
eq A
250000K, 0
E5o/order F10114 (10% pa
=
= =

*A
calculate roo
*Material lasta roo

Ifsuppli
*

offers discountof2%.
Iforder is place
is
Quarterly should we
exceptthe offer.

E00=in I
* 2x250000 x
50
50001
=

- 10%X510

Material
*
lost
E
Purch. Cost = (Ax Purch, prinlis 25000014 x
10114 25,00,000
 Ordering lost= 1 x 0 in
2000, fiolod 2500
order size

carrying last:
ordesinx is
50 x 110x10%) 2500

Material lost >25,05,000

④

Analysis ofDiscount proposal

*
New Price 10-2%
=

180/14
=

Quarterly order -> y order

Order S12
25000014 62500k9.
=
=

I
Purch. Lot
25000014 x 9.8011 24,50,000

Ordering lot orders x

Eiofordu 200

carrying 625001
lost x(59.80 -
x 10%) 30625

Imp
*

Natural lost 24,80,825

- -
- -

↳on offer should be

exceptly As itlead
24,80,829)
to
saving of
24175
& (25,05,000-
a
 A Flogjorduc= E311pa Purch
937501 0
F101
=

price
=
=

calculate
*
goo
discount
*

Supplier is
willing to
offer of3%. Iforder six
is
187501. Should we
except the offer.

roo=0 I
in
*
-
2x93250x100
3
=
25001

Discount
Analysis
*
of proposal New Price =
10-3%= 9.70

Material &
Lost E00 Material costorder size= 18750.
* E
Purch. Lost193750x10) 9,37,500 Purch. Lost95710x9,70 909375

Tox
3750 500
950
wot 100
x out 100

carrying last2 x 3 3790 corry. cost -50 x 3 2812

Material Cost 945000

-
Material cost 938000
- =>

Mr Accept Discountoffer As leads

it to
savings of$1000 I
 May 2018 5 Marks

=>x5000
roo-to isI 2x12000x1800 600
=
units
640x 18.75%

Material lita roo Material lost IfOrdu size 3000

=

E
⑭lat 12000 x 640
=

76,80,000 Durch Loct=12000x600 72.96,000

=

ordulost I
10X 1800 36000 cost =
1 x 1800 7200=

600 3000

miglat 20x(640x18,5y)36000mct=30x1600 18-757)

=
x 1,711000

Material lost-> 77,52,000 Material cost - 7 4,74,200

- - -
-
-

New Price is 640-5% 608

=

Dension: Acceptthe offer As itleads to savings of

2,77,800
*
c
Inventory Mantain cost
=

Int
21211 pa
=>

lec,
carrying =

0.2511pax12m =
[3114 pa

Total
carrying lost =>
F12+E3 in
215, pa

2.5 units FG= RN

of 114
ro=
unit

100000
Fy 4x100000
=

=10000
1
 May 2014 18Mau) Imp 114RM 2.50 units
of te
=

?
=100,000 of fl
unit
A
=

14x100000 units =

40000K
25 units
2. To unit =
114
0
E340
=
+
5380 7o/ordu
=

Ieir=1**K
100000 unit
x0.4014
c
10.25/14ponx12m) E12/14 pa=E15114 pa =40000
↑
=
+

(a) ROO=
↳ is I -
250
2x40,000 x

15114 pa
=
20001
⑭
(b) How
frequently order
should be place?
dir men plan hoga
Agla order lime

No.
in
*
of orders -
old 20 orders
=>

20001
 Frequency of day- daysa
order -> 18.25
1 189

Or
0.60 month
or D
=

Or

2 weeks
5 = 2.6 Week
-

rder

Material cost of roo Material cost ->

Dvantly order

I
400001:407 =

1000014
Purch Purch
(at
=>400001x80 3200000 last:
4000014x80 25200000
=
=

x 750 15000 ordulot:· Yordux7o=

⑭glast=>200rdu 13000
=

gloil=>ol x is I 1000
carrying last10 x 15= E7,000
aterial lost
↑
-> 3230000
-
Material lost -
E32,78,000
-
- -

Discoverclain=>
432,70,000- E32,50,000 => E48000/-
Discountclaim 248000x100 1.50%
% =
=

3200000
&
Thank You