Answers on Board Work Exercises on Cost Accounting and Control – Purchasing Materials

Recording Raw Materials Purchases:

1. PURCHASE ORDER

Big Manufacturers Inc. Purchase Order No. 144

123 Molave Street Date: 4/4/18
Fairview Ave., Quezon City

Small Products Inc., Date Wanted: 4/17/18

54 West Ave., Cebu City
QUANTITY DESCRIPTION UNIT PRICE AMOUNT
4,390 103 – 2’x4’ plastic sheeting P1.20 P5,268.00
840 122 – 3’x5’ plastic sheeting 1.90 1,596.00
1,890 142 – 4’x6’ plastic sheeting 2.60 4,914.00
P11,778.00
By: Charge: Acct. No. 121
Purchasing Agent Job

2. RECEIVING REPORT

Big Manufacturers Inc., Receiving Report 403

123 Molave St.,
Fairview Ave., Quezon City

Received from: Small Products Inc., Date Received: 4/14/18

54 West Ave., Cebu City Purchase Order No. 144
Invoice No. 539

Ship Via: Fedex Transport Charges: Prepaid Received by:

Quantity Quantity Quantity Description Weight
Received Accepted Rejected
4,390 4,250 140 103 – 2’x4’ plastic sheeting 425 k
840 840 0 122 – 3’x5’ plastic sheeting 210 k
1,890 1,890 0 142 - 4’x6’ plastic sheeting 945 k

Inspection Record
Quantity Accepted Quantity Rejected Reason for Rejection
4,250 140 Imperfections in the sheets.
Do not replace.
Date: Inspected by:

3. DEBIT MEMORANDUM

Big Manufacturers Inc., Debit Memorandum No. 085

123 Molave Street
Fairview Ave., Quezon City
 To: Small Products Inc., Date: 4/19/18
54 West Ave., Invoice No. 539
Cebu City Invoice Date: 4/17/18
Quantity Purchase Order No. Description Unit Price
Amount
140 144 103-2’x4’ plastic sheeting P1.20 P168.00

Explanation: Crack in the sheets. Do not replace.

Returned Via: Fedex Purchasing Agent:

4. DISBURSEMENT VOUCHER

DISBURSEMENT VOUCHER
Big Manufacturers Inc., Voucher No. 0740
123 Molave Street Issue Date: 4/19/2018
Fairview Ave., Quezon City

Payee: Small Products Inc.,

54 West Avenue,
Cebu City

Invoice Date Terms Invoice No. Amount

4/17/2018 2/10, n/30 539 P11,778.00
Less: DM 085 168.00
P11,610.00

Account No. 121 Amount: P11,610 Check No. 00127

Approved by:

MULTIPLE CHOICE:

Total Order Cost = Cost per order x No. of orders

= P500 x 1
Total Order Cost = P500

Total Carrying Cost = Amount to Carry an Item in Inventory x Average Inventory

= ( 20% x P 1 ) x ( P10,000/2 )
= .20 x 5,000
Total Carrying Cost = P1,000

Total Order Cost and Carrying Cost = P500 + P1,000

= P1,500 A

Number of Orders = Annual requirement/Order size

Average Inventory = Order size/2