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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 = 10,000

EOQ 671

= 14.90
= 15 orders
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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

10 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)

P800
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
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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
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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
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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

54 West Avenue Date Wanted 4/17/08
Cebu 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. 121

Purchasing Agent Job________
Dept. ______

2. Receiving Report

Big Manufacturers Receiving Report 403

123 Molave Street
Fairview Ave., QC

Received From: Small Products Date 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)

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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)

Purchasing 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. BPI 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.

25: 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 of 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