GOBIND KUMAR JHA 9874411552

B.Com.(Semester – II)
Cost & Management Accounting – I
Material Test
1. XYZ Ltd. manufactures 2,000 units of a product per month. The purchase price of the raw material is ₹
10.00 per kg. the consumption of raw material varies from 100 kg to 400 kg per week. The re-order
period is 4-8 weeks. The average (normal) consumption per week of the raw material is 250 kg. The cost
of placing an order is ₹ 130.00, carrying cost of inventory is 20% per annum. You are required to
calculate: (i) Re-order Quantity; (ii) Re-order Level; (iii) Maximum Level; (iv) Minimum Level.

2. The following data are available in respect of the material used in Progressive Engineering Co. for the
year 2016. Material purchase price per unit – ₹ 12; Interest per unit per month – ₹ 0.10; Clerical and
Administration cost per order – ₹ 200; Insurance charges per annum – 12%; Wastage of material per
unit quarter – 2%; Cost of buying office, inspection and accounting per order – ₹ 400; Quarterly
consumption of material – 3,000 units. You are required to compute: (a) Best Ordering Quantity of the
material buying; (b) Time gap between two consecutive orders; (c) Total inventory cost at optimal
policy of buying.

3. Record the following transactions in the stores ledger using Weighted Average Method.
2022
Particulars Units Price (₹)
March
1 Balance in hand 3,000 2
2 Purchased 2,000 2.20
3 Issued 1,500 ?
5 Purchased 2,000 2.30
10 Issued 1,500 ?
15 Issued 2,000 ?
20 Purchased 2,000 2.40
31 Issued 1,500 ?