COSTING FOR RAW MATERIALS

Which department is responsible for ensuring optimal stock levels are maintained?

• Purchasing Department

• Accounting Department

• Stores Department

• Finance Department

Which of the following is NOT a characteristic of FIFO?

• Issues old items first

• Stock valuation is based on current market value

• Product costs reflect current conditions

• Administratively clumsy

What is the primary objective of a stock control system?

• To maximize the cost of materials

• To increase stock-out costs

• To minimize costs associated with stock

• To eliminate stock recording

What document is used to track materials charged to a particular job or department?

• Goods Received Note (GRN)

• Stores Requisition (SR)

• Purchase Order (PO)

• Supplier Invoice

What is one of the problems associated with material pricing?

• Uniform pricing across all suppliers

• Consistent prices for all deliveries

• Sensitivity of profit calculations to pricing method

• Easy identification of materials

What is the main purpose of a stock control system?

• To increase inventory costs

• To eliminate stock recording procedures

• To maximize the number of stock purchases

• To ensure sufficient stock is available for production