CHAPTER 2

Multiple Choice Questions – Theoretical

1. c 6. b 11. a2. b 7. c 12. a3. a 8. b 13. a4. b 9. b 14. a5. 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) + SSQSSQ = 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 = 10,000EOQ 671

= 14.90 = 15 orders

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7. (a)

Demand each = DWorking day Number of working days

= 10,000 365

= 27.40 jerseys per day

Purchase lead time = 7 daysReorder 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 andStock 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) = 750OP = 20 (7,200 / 240) + 750 = 1,350

2

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 P5080

= 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 COCO = 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 weeksReorder point = 400 x 2 = 800 yards

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SOLUTIONS TO PROBLEMS

Problem 2-1

1. Purchase Order:

Big Manufacturers Purchase Order 144123 Molave Street Date 4/4/08Fairview Ave., QC

To: Small Products Shipping Instructions54 West Avenue Date Wanted 4/17/08Cebu 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 403123 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 QuantityAccepted 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. 085123 Molave StreetFairview Ave., QC

To: Small Products Date 4/19/200854 West Avenue Invoice No. 539Cebu 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. 0740123 Molave Street Issued Date 4/19/2008Fairview Ave., QC Due Date 5/27/2008

Payee Small Products54 West AvenueCebu City

Invoice Date Terms Invoice No. Amount 4/17/2008 2/10, n/30 539 P 11,778.00

Less DM 085 168.00P 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

2008Oct. 24: Materials 92,235.00

Vouchers payable 92,235.00To record voucher to Veterans Corp.On invoice of October 21 for 4,800 units,Of which 510 were returned.

25: Vouchers payable 92,235.00Purchase discounts 922.35Cash 91,131.65

To record payment of Voucher 014Note: No journal entries are needed for theTransactions 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

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