Gives examples of Material losses

Tweet Material losses include loss of quantity, weight or volume of materials. Some examples of material losses which are incurred from the following: Obsolescence re: change of specification results in certain type of materials become useless Losses during handling like in pilferage, breakage, etc Storage like fading, rusting, warping affect the materials or inventories Loss […]

What do you think should the objectives of an efficient system of storekeeping

Tweet Inventories whether they are materials, work-in-progress and finished goods constitutes a large part of cost for an organization. It is therefore important to understand the following major objectives of an efficient system of storekeeping which are as follows:- That not too much inventories is held That not too little inventories is held That loss […]

Explain what is a Cost Statement?

Tweet A cost statement or cost sheet or cost card shows the detailed cost of a cost centre or cost unit.Append below is a simple format of a cost statement: Cost Statement or Cost sheet or Cost Card  $ Direct material cost            5,000 Direct labor cost            4,000 Direct expenses            1,000 PRIME COST […]

Imprest Petty Cash With Question and Answer

Tweet Earlier article on  imprest petty cash system refers. Below is a very simple worked question and answer for the reader to enhance the understanding of imprest petty cash system. Question: ABC Enterprise has the following petty cash transaction for the month of January 2012:- Jan Description $ 1 Received from cashier 450.00 2 Cleaning […]

Explain what are Non-current liabilities and current liabilities

Tweet As we know liabilities are financial obligations of the business to external parties which consists of two major categories namely: Non-current liabilities and Current liabilities NON- CURRENT LIABILITIES CURRENT LIABILITIES Amounts owing by the business that are NOT REPAID WITHIN ONE YEAR.   Examples are Long term loan, Mortgage on Property and Debenture Amounts […]

Explain what are non-current assets and current assets owned by a business

Tweet Below tabulates what are non current assets and currrent assets owned in a business:- As we know assets are property owned by a business which consists of two major categories namely: NON-current assets and Current assets NON- CURRENT ASSETS CURRENT ASSETS Assets bought not for resale but to be used in the operations of […]

What are the advantages and disadvantages of using the Periodic Review Inventory control system

Tweet Append below a table to show the advantages and disadvantages on using the Periodic Review Inventory Control system:   ADVANTAGES of Periodic Review Control System: DISADVANTAGES of Periodic Review Control System: 1 All stock items are reviewed periodically so that there is likely to be less obsolete stocks 1 In general larger stocks are […]

What are the advantages and disadvantages of using the Re-order Level Inventory control system

Tweet The following tabulates the advantages and disadvantages of using the Reorder level inventory control system:   ADVANTAGES of Reorder Level Inventory Control DISADVANTAGES of Reorder Level Inventory Control 1 Lower stocks on average 1 Many items may reached re-order level at the same time, thus overloading the re-ordering systems 2 Under reorder level inventory […]

In Inventory control, what the assumptions underlying the Economic Order Quantity(EOQ)

Tweet Economic order quantity is defined as the ordering quantity which minimises the balance of cost between inventory holding costs and re-order costs.Underlying assumptions in an Economic Order Quantity model are: That there is a known, constant stockholding cost That there is a known, constant ordering cost, That rates of demand are known, That there […]

In Inventory control, explain what are stock-out costs and give examples of stock-out costs

Tweet When dealing with inventory control, quite often we encounter terms like stock out costs and would like to give some examples of them. Tabulated below the definition of stock out costs and some examples: Stock-out costs are costs associated with running out of stock Examples of stock-out costs are: Lost contribution through the lost […]