Page 91 - DCOM202_COST_ACCOUNTING_I

Unit 4: Material Control

4. Discuss the importance of good stores keeping in an organization. What are the duties of a Notes
store-keeper?
5. Write short notes on the following :
(a) Bin Card (b) Material Transfer Note
(c) Stores Requisition (d) Material Return Note
6. What is meant by Bill of Materials? Explain in detail.

7. What are the major differences between Bin Card and Stores Ledger? Illustrate your answer
with specimen forms of each of the stores records.
8. Why is it necessary to fix various levels for materials?

9. Define re-ordering level and explain its relation to maximum and minimum stock levels.
What factors must be considered in fixing re-ordering level and quantities?
10. Define and explain how do you compute the following :
(a) Maximum Level (b) Minimum Level

(c) Re-order Level (d) Average Level
11. What are the methods of pricing of material issues? When do you advocate pricing the
issues at the highest purchase price?

12. Critically evaluate the roles of carrying costs and ordering costs on the economic order
quan tity.
13. Write short notes on the followings:
(a) FIFO Method (b) Simple Average Cost Method

(c) LIFO Method (d) Weighted Average Cost Method
14. Write a note on inventory turnover ratio in detail.
15. Explain the role of stock verification in inventory control.
16. Briefly explain the ABC Analysis system of stores control.
17. Briefly explain the Standard cost method/Market price method of pricing the issues.

18. Write short notes on the following:
(a) Stores ledger account (b) Inventory control
(c) purchase order (d) Economic order quantity
19. Describe briefly the perpetual inventory system of inventory control. What are its
advantages and disadvantages?
20. Explain briefly the functions of the purchase department and outline the procedure for
receiving and recording materials that are purchased.

21. Outline the steps in the purchasing procedure from the time a need for material is
determined until the material is stored and paid for.
22. Explain fully the duties and responsibilities of the storekeeper of a large manufacturing
concern.
23. “Control of materials cost through stores ledger is essential costing system”. Discuss.
24. “An adequate system of store accounting is an essential feature of many cost accounting
systems”. Discuss in detail.

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