Cost Accounting

towntown

I have a cost accounting repeat coming up next week and i'm unsure of one question regarding inventory control.

How many purchase orders are required to satisfy the annual demand , assuming a cost effective order size?

I have all the calculations done for the EOQ, Re-Order Level, Min and Max Usage.

The EOQ is not the only consideration in determining the order quantity. Explain the other factors considered?
Is that just basically elaborating on Lead Time, Re-Order Level, Max Stock etc.


And finally, I really struggle to grasp LIFO,FIFO and Weighted average. Ive tried looking at YouTube videos but they are all over the place and very difficult to follow. Are there any decent guides online?

OttoPilot

Sounds right for the second question. Basically, its any factors that affect order size that aren't in the EOQ calculation. I'd imagine supplier capacity would be another one too but your answers sound right.

For LIFO/FIFO and Average cost you just have to practice questions. It's not terribly difficult to understand but you'll only get the understanding by repetition of questions. Are you doing professional exams or college exams? Do you have many questions to practice?

towntown

OttoPilot wrote: »

Sounds right for the second question. Basically, its any factors that affect order size that aren't in the EOQ calculation. I'd imagine supplier capacity would be another one too but your answers sound right.

For LIFO/FIFO and Average cost you just have to practice questions. It's not terribly difficult to understand but you'll only get the understanding by repetition of questions. Are you doing professional exams or college exams? Do you have many questions to practice?

OttoPilot wrote: »

Sounds right for the second question. Basically, its any factors that affect order size that aren't in the EOQ calculation. I'd imagine supplier capacity would be another one too but your answers sound right.

For LIFO/FIFO and Average cost you just have to practice questions. It's not terribly difficult to understand but you'll only get the understanding by repetition of questions. Are you doing professional exams or college exams? Do you have many questions to practice?

Thanks,

It's a college repeat from 2nd year. I have finished 3rd year and need to pass this repeat in order to progress to 4th year (Level8) I had a opportunity to repeat last August but didn't because my partner had just given birth. I reckon I have around 10% heading into the exam. The exam is worth 70%.

OttoPilot

In that case, focus on whatever revision questions are on moodle/blackboard or wherever the lecturer gave them out. Also look at past revision questions. If you can do all/most of them even from repetition without understanding you'll be in pretty good shape. The questions don't have a whole lot of complication in them beyond what practice questions will have.

towntown

Identify each of the following cost items as either direct material, direct labour, direct
expense, production overhead or non production overhead


Lecturer employed by a university. Direct Expense

Varnish used on plaques in a plaque manufacturing company.

Supervisor in the production department Direct Labour

Royalties per unit produced Non Production Overhead

Depreciation of office equipment Non Production Overhead

Are the above answers correct?