# CA Inter/IPCC - Material Cost

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### Description

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## Resource summary

### Question 1

Question
A company manufactures a product having a demand of 100 Kg per week. The product requires 16 units of raw material X costing Rs.5.2 per unit. The ordering cost is Rs.900 per order and the carrying cost is 20%. What is the EOQ of raw material X?
• 3,000 units
• 12,000 units
• 3,000 Kg
• 12,000 Kg

### Question 2

Question
EOQ of product A is 5,000 units. Monthly demand of raw material is 10,000 units and the ordering cost per order is Rs.500. What will be the total ordering cost?
• Rs.1,000
• Rs.6,000
• Rs.12,000
• None of the above

### Question 3

Question
EOQ of product A is 10,000 units. Total ordering cost is Rs.1,20,000. Carrying cost is 25%. Compute the purchase price?
• Rs.24
• Rs.6
• Rs.96
• None of the above

### Question 4

Question
The company incurs total cost of Rs.32,00,000 while placing under EOQ model. This include Rs.1,00,000 on ordering cost. The company incurs an additional cost of Rs.30,000 under quarterly ordering system. What percentage of discount the company should negotiate under quarterly ordering system?
• 0.9375%
• 30%
• 0.97%
• 1%

### Question 5

Question
Safety stock = 500 units; Minimum consumption = 100 units per week; Average consumption = 200 units per week; Lead time = 1 to 2 months. Compute ROL?
• 900 units
• 1,100 units
• 2,900 units
• 2,400 units

### Question 6

Question
Raw material P constitute 60 percent of consumption value and 10 percent of consumption quantity. Raw material Q constitute 30 percent of consumption value and 30 percent of consumption quantity. How will P and Q be classified as per ABC analysis?
• P – Category C; Q – Category B
• P – Category A; Q – Category C
• P – Category A; Q – Category B
• P – Category B; Q – Category A

### Question 7

Question
ROQ = 5 Tonnes; Maximum level = 8 Tonnes; Minimum usage = 50 kg per hour; Minimum re-order period = 4 days; Daily working hours = 8 hours. What is the ROL?
• 3,000 KG
• 4,600 KG
• 3,200 KG
• 203 KG

### Question 8

Question
A company receives 75 percent of the delivery in 6 days, 10 percent on 7th day, 5 percent on 8th day, 5 percent on 9th day and balance 5 percent on 10th day. The daily consumption level is 500 units. Calculate the ROL if the company is willing to take 25 percent risk of stock-out?
• 3,500 units
• 3,000 units
• 5,000 units
• 4,000 units

### Question 9

Question
Safety stock = 900 units; EOQ = 9,000 units; Total ordering cost = 2,70,000. What would be the total carrying cost?
• Rs.3,24,000
• Rs.2,70,000
• Rs.2,97,000
• Rs.3,00,000

### Question 10

Question
Opening stock of RM = Rs.10,000; Purchases = Rs.52,000; Closing stock = Rs.6,000. Calculate the no of days RM inventory is maintained?
• 50 days
• 56 days
• 52 days
• 42 days

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