Page 58 - DMGT202_COST_AND_MANAGEMENT_ACCOUNTING

Unit 3: Material Control

Prepare a store ledger account showing how the value of the above issues should be arrived at Notes
under the base stock method when it operates in conjunction with LIFO. Base stock is 200 units.
Stores Ledger Base Stock Method (Last In First Out Model)

Date Particulars Receipts Issues Balance
Qty. Total Unit Qty. Total Unit Qty. Total Unit
cost ` cost ` cost ` cost ` cost ` cost `
Jan 1 Opening --------------------- ------------------------- 500 2 1,000
balance
Jan 6 Requisition ------------------------ 200 2 400 300 2 600
Slip No
Jan 10 Receipt No 400 2.20 880 --------------------- 300 2 600
400 2.20 880
Jan 15 Receipt No 300 2.40 720 ---------------------- 300 2 600
400 2.20 880
300 2.40 720
Jan 20 Requisition --------------------- 300 2.40 720 300 2 600
slip No
200 2.20 440 200 2.20 440
Jan 21 Requisition ----------------------- 200 2.20 440 300 2 600
slip No
Jan 24 Receipt No 500 2.60 1,300 --------------------- 300 2 600
500 2.60 1,300
Jan 25 Requisition 300 2.60 780 300 2 600
No ----------------------------
200 2.60 520
Jan 28 Requisition ------------------------ 200 2.60 520 Closing Stock Value
No
300 2 600

Self Assessment

Fill in the blanks:
9. The ...................... method helps the management to quote competitive prices on the basis of
latest consignments.
10. Under the weighted average method, the ...................... is found out through the appropriate
assignment of weights considered for the determination of weighted average price.

11. Under ......................, the minimum or safety stock of materials is to be stored from the initial
lot of purchase by the enterprise.
12. This ...................... method does not facilitate the recovery of the cost price of the materials
through the issue price of the material calculated.
13. The major underlying assumption of ...................... method is to value the closing stock as
minimum as possible at the end of concluding the stores register.
14. If the materials are grouped together irrespective of purchase price, the issues should be
done appropriately on the basis of ...................... method.

15. The ...................... of replacement of materials against the issues is possible only during the
trend of falling prices.

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