REQUIRED

Study the information provided below and determine whether Neston Traders should borrow the cash to settle the account. Motivate your answer by calculating the cost of forfeiting the discount (expressed as a percentage to two decimal places).

(5 marks)

INFORMATION

Neston Traders purchased inventory on credit for R30 000. The supplier offered Neston Traders the option to settle the account by paying R28 800 up to 10 days after the sale or pay R30 000 by the end of 60 days. Neston Traders can borrow cash from its bank at a rate of 18 percent per annum to settle the account within 10 days.

1.2

REQUIRED

Use the information provided below to calculate the economic order quantity.

(5 marks)

INFORMATION

Maxwell Wholesalers anticipates sales of 10000 units per month, a purchase price of R40 per unit, an ordering cost of R12 per order, and a carrying cost of 20% of the unit cost price.

1.3

REQUIRED

Use the information given below to calculate the value of closing inventory as at 31 March 2024 and the value of issues during March 2024 using the following methods of inventory valuation:

1.3.1 First-in-first-out

(5 marks)

1.3.2 Weighted average cost. (Express the average cost per unit in Rands and cents.)

(5 marks)

INFORMATION

The following transactions of Seatides Manufacturers took place during March 2024 in respect of a component used in production:

\table[[Date,Transactions,],[01,Opening inventory,800 units @ R20 per unit],[07,Purchased from a supplier,1400 units @ R22 per unit],[15,Purchased from a supplier,2700 units @ R24 per unit],[16,Returned to the supplier (see 15 5𝑀  March),200 units],[28,Purchased from a supplier,300 units @ R25 per unit],[31,Issued to production during March,4000 units]]