Snappy Chef (Pty) Ltd is a manufacturer of kitchenware in South Africa, due to the...
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Accounting
Snappy Chef (Pty) Ltd is a manufacturer of kitchenware in South Africa, due to the energy crisis in the country one of their fast-moving products has been the stainless-steel whistling kettle used on gas stoves. The company uses the weighted average method to value their stock, management has requested that you assist them with valuing their inventory at the end of August 2023. Furthermore, management is reviewing the inventory management system to ensure they dont run short of one of their key raw material components, steel.
Date
Details
Quantity
Price (price/unit)
7
Purchases
350
120
9
Issued to production
376
12
Purchases
336
125
18
Issued to production
290
Additional information
There were 50 bags in stock at the end of July 2023, valued at R5 000
Steel is purchased in 80-kilogram bags and 7 800 bags are used each year.
The cost of placing a typical order for steel is estimated at R300, and the annual cost of carrying steel in inventory is R40 per bag per year.
The company uses the perpetual inventory method.
REQUIRED
a) Calculate the closing value of stock using the weighted average method (10)
b) Calculate the economic order quantity (3)
c) Calculate the number of orders (2)
When completing the template below ensure that numbers are written without the R symbol and without spacing for example R2 500 is filled in as 2500 .Where necessary round of the numbers to 2(two) decimal places. e.g R15,789 is filled in as 15.79
(a)
Date
Purchased
Sold
Balance
Units
Price/u
Amount
Units
Price/u
Amount
Units
Price/u
Amount
Opening
Answer
Answer
Answer
7
Answer
Answer
Answer
Answer
Answer
Answer
Answer
Answer
Answer
9
Answer
Answer
Answer
Answer
Answer
Answer
12
Answer
Answer
Answer
Answer
Answer
Answer
Answer
Answer
Answer
18
Answer
Answer
Answer
Answer
Answer
Answer
(b)
(c)
Snappy Chef (Pty) Ltd is a manufacturer of kitchenware in South Africa, due to the energy crisis in the country one of their fast-moving products has been the stainless-steel whistling kettle used on gas stoves. The company uses the weighted average method to value their stock, management has requested that you assist them with valuing their inventory at the end of August 2023. Furthermore, management is reviewing the inventory management system to ensure they dont run short of one of their key raw material components, steel.
Date
Details
Quantity
Price (price/unit)
7
Purchases
350
120
9
Issued to production
376
12
Purchases
336
125
18
Issued to production
290
Additional information
There were 50 bags in stock at the end of July 2023, valued at R5 000
Steel is purchased in 80-kilogram bags and 7 800 bags are used each year.
The cost of placing a typical order for steel is estimated at R300, and the annual cost of carrying steel in inventory is R40 per bag per year.
The company uses the perpetual inventory method.
REQUIRED
a) Calculate the closing value of stock using the weighted average method (10)
b) Calculate the economic order quantity (3)
c) Calculate the number of orders (2)
When completing the template below ensure that numbers are written without the R symbol and without spacing for example R2 500 is filled in as 2500 .Where necessary round of the numbers to 2(two) decimal places. e.g R15,789 is filled in as 15.79
(a)
Date
Purchased
Sold
Balance
Units
Price/u
Amount
Units
Price/u
Amount
Units
Price/u
Amount
Opening
Answer
Answer
Answer
7
Answer
Answer
Answer
Answer
Answer
Answer
Answer
Answer
Answer
9
Answer
Answer
Answer
Answer
Answer
Answer
12
Answer
Answer
Answer
Answer
Answer
Answer
Answer
Answer
Answer
18
Answer
Answer
Answer
Answer
Answer
Answer
(b)
(c)
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