TULLI 1. (a) Alpha Ltd, manufactures a product from a raw material which is purchased at 60 per kg. The company incurs handling charges of 750 per order. The incremental carrying cost of inventory of raw material is 0.50 per kg per month In addition, the company needs working capital finance on such investment in inventory of raw materials which is 2.25 per kg per quarter. The annual production of the product is 1.00,000 units and 25 units are obtained from 10 kg of such raw materials, In the above situation, as a cost accountant, you have asked by the management of the company to present a report before them stating- (1) the quantity of raw materials that should be ordered to get the advantage of economy of cost, (i) how frequently should orders for procurement be placed and Citi) if the company proposes to rationalize placement of orders on quarterly basis, what percentage of discount in the price of raw materials should be negotiated? find the earning of worker A
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