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Business · Accounting
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Question1 (27 Marks) Mazembezi runs a small business as a manufacturer based in Katimo Mulilo. The company needs some advice om you as an Assistant Management Accountant. You are presented with the following information: It takes Mazembezi two to four months to receive the raw materials from their suppliers. The organization uses a maximum of 300 units per month at most, and a minimum of 5 units per day. At least 50 units should always remain in the warehouse at all times. It costs them N$8.00 each time they make an order and pay N$5 per unit of material. The Organisation rent a warehouse for which they are charged a 10% on inventory value per annum The opportunity cost lost for not investing the money in a financial institution is 10%The organization operates on a 12 months calendar year (360 days per year). Assume there are 30 days in each month. Required 1.1Calculate the reorder point 1.2 Calculate the economic order quantity 1.3 What would be the average inventory? 1.4 What would be the maximum inventory? 1.5 How many orders will be placed in a year? 1.6 How much will it cost to keep inventory in the warehouse? 1.7 How much will it cost to place all orders in a year? 1.8 What would be the cost of purchasing the inventory for the year? 1.9 Explain what Non-linear variable cost is? 1. 10 Explain what is period cost and Step fixed cost (2 Marks) (3 Marks) (2 Marks) (2 Marks) (2 Marks) (2 Marks) (2 Marks) (3 Marks) (3 Marks) (6 Marks)
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