1

CHAPTER 2
Multiple Choice Questions – Theoretical

1. c 6. b 11. a
2. b 7. c 12. a
3. a 8. b 13. a
4. b 9. b 14. a
5. a 10. a 15. a

Multiple Choices - Computational

1. (a)

10,000 x P500​ + ​P1 x .20 x 10,000 ​= ​P1,500

10,000 2

2. (a)

1,000 + 1,500 = (100x 20) + SSQ

SSQ = ​500 units

3. (a)

EOQ = ​2 x 5,200 x P250

P5
= ​721

4. (a)

5,200/721 = ​7.2

5. (a)

D = 10,000, P = P225, C = P225

EOQ = ​2 DP ​= ​2 x 10,000 x P225

C 10

= 670.82
= ​671 jerseys

6. (a)

Number of orders per year = ​D ​= 1​ 0,000

EOQ 671

= 14.90
 = ​15 orders
2

7. (a)

Demand each = D
Working day Number of working days

= ​10,000
365
= 27.40 jerseys per day

Purchase lead time = 7 days

Reorder point = 27.40 x 7
= ​191.80 ​or 192 jerseys

8. (a)

2 x 50,000 x ​P5 ​= ​500

​P2

9. (a)

[(10,000 / 250) x 30] + [(70 - 30) x 40]

30 ( 10,000 / 250) + 40 ( 70 - 30) = ​2,800

10. (a)

Safety Expected Stockhout Carrying Stockhout and ​Stock Stockout Cost Cost
Carrying costs

1​ 0 2.5 P200 P 20 P220 20 1.5 120 60 180 50 .5 40 100 140 55 .25 20 110
130

11. (a)

(1,400 - 600) + 2,000 = ​2,800

12. (a)

​ 800
P
P.12 + P.10 + 10,000 = ​.30

13. (a)

SS = (7,200 / 2,400) x (45 – 20) = 750

OP = 20 (7,200 / 240) + 750 = 1,350
3

14. (a)

2 x RU x CO
CU x CC
 2 x 1,000 x P50
P100 x .15625

EOQ = 6,400

= 6400
= ​80

15. (a)

Order Cost ​= RU x CO
EOQ

= 1​,000 x P50
80
= ​P625

16. (a)

CC = ½ x EOQ x CU x CC
= ½ x 80 x P100 x .15625
= ​P625

17. (a)

140 + (100 x 7 days) = ​840

18. (a)

140 + (1,000 / 2) = ​640

19. (a)

140 + 1,000 = ​1,140

20. (a)

1,000 = ​2 x 25,000 x CO
P1

1,000 = 50,000 x CO

1,000,000 = P50,000 x CO
CO = P20
4

21. (a)

EOQ = ​2 x 20,000 x P160

P1.60
 = ​2,000 yards​.

22. (a)

20,000 / 2,000 = ​10 order

23. (a)

Demand each working day = Annual demand / No. of working days = 20,000/250
= 80 yards per day
= 400 yards per weedl

Purchasing lead time = 2 weeks

Reorder point = 400 x 2 = ​800 yards
5

SOLUTIONS TO PROBLEMS

Problem 2-1

1. ​Purchase Order​:

Big Manufacturers Purchase Order ​144​ 123 Molave Street Date ​4/4/08
Fairview Ave., QC

To: ​Small Products ​Shipping Instructions 5​ 4 West Avenue ​Date Wanted ​4/17/08
C​ebu City

Quantity Description Unit Price Amount

​4,390 103 – 2” x 4” plastic sheeting P1.20 P5,268.00 840 122 – 3” x 5” plastic sheeting 1.90
1,596.00 1,890 142 – 4” x 6” plastic sheeting 2.60 ​4,914.00​ P11,778.00

By ​(Student’s Name)​ Charge: ACCT. 1​ 21​ Purchasing Agent Job________

Dept. ______

2. Receiving Report

Big Manufacturers Receiving Report 403 123 Molave Street

Fairview Ave., QC

Received From: ​Small Products D

​ ate Received ​4/4/08​ ​54 West Avenue
Purchase Order No. ​144​ ​ Cebu City ​Invoice No. 539

Ship Via ​Fedex ​Tansport Charges ​Prepaid ​Received By ​(Student’s Name)

Quantity Quantity Quantity

Received Accepted Rejected Description Weight

​4,390 4,250 140 103-2”x4” plastic sheeting 425 k 84 840 -0- 102-3”x5” plastic sheeting 210 k
1,890 1,890 -0- 103-4”x6” plastic sheeting 945 k
 Inspection Record
Quantity Quantity
Accepted Returned Reason for Rejection

​4,250 140 Imperfections in the sheets. Do not replace ​Date Inspected by ​(

Student’s Name)

3. Debit Memorandum

Big Manufacturers Debit Memorandum No​.​ 085​ ​123 Molave Street

Fairview Ave., QC

To: ​Small Products ​Date 4​ /19/2008

54 West Avenue ​Invoice No. ​539
Cebu City ​Invoice Date ​4/17/2008

Purchase Unit
Quantity Order No. Description Price Amount ​140 644 103 – 2” x 4” plastic

sheeting P1.20 P168.00

Explanation ​Crack in the sheets. Do not replace.

Returned Via ​Fedex​ (Student’s Nam) P

​ urchasing Agent

4. Disbursement Voucher

DISBURSEMENT VOUCHER

Big Manufacturers Voucher No​. ​0740

123 Molave Street Issued Date ​4/19/2008​ ​Fairview Ave., QC Due Date
5/27/2008

Payee ​Small Products

54 West Avenue
Cebu City

Invoice Date Terms Invoice No. Amount

​4/17/2008 2/10, n/30 539 P 11,778.00 Less DM 085​ 168.00

P 11,610.00

Destribution

Account No. Amount ​Check No. ​B​PI 000127​ ​ ​121 P11,610.00 ​Approved By

5. ​A request for a purchase must be made by an authorized person.

A purchase order must be prepared and approved by an authorized person.
 All materials must be checked to see that they correspond to the purchase order and are in
good condition.
Payment is made only after proper approval.
Various steps in the purchasing procedures are delegated to different persons to lessen the risk
of fraud or error.
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Problem 2-2

2008
Oct. 24: ​Materials 92,235.00 Vouchers payable 92,235.00
To record voucher to Veterans Corp.
On invoice of October 21 for 4,800 units,
Of which 510 were returned.

2​ 5: ​Vouchers payable 92,235.00 Purchase discounts 922.35

Cash 91,131.65
To record payment of Voucher 014
Note: No journal entries are needed for the
Transactions on October 4, 5, and 21.

Problem 2-3

​VOUCHER REGISTER For the Month o​f ​March, 2008

​Voucher
Voucher ​Paid ​Payable Materials Date No. Payable to Date Check. No. Cr 201 Dr. 121

​March 031 Lim Supply Company P17,871.00 P17,871.00 032 Tan Corporation 42,930.50 42.930.50 033 Sy
Company 16,896.00 16,896.00
034 Ong Company 208,821.00 208,821.00 286,518.50 286,518.50