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CA Inter Inventory Valuation — practice questions — page 2

Explore 66 free Inventory Valuation questions in CA Inter Cost and Management Accounting. Open each question or exercise to read its content, reference answers and available explanation.

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Inventory Valuation questions and exercises with answers

Showing questions 31–60 of 66.

Goods cost Rs 600 but their NRV has fallen to Rs 570. At what value are they recorded?Read the answer and worked solution →Stock at retail is Rs 20,000 and the cost to retail ratio is 60%. Estimated cost?Read the answer and worked solution →Sales are Rs 500,000 and last year's margin was 30%. Estimated gross profit?Read the answer and worked solution →EOQ is the order quantity that minimises which costs?Read the answer and worked solution →Who developed the EOQ model in 1913?Read the answer and worked solution →EOQ assumes demand for the product is what?Read the answer and worked solution →In EOQ, the cost of placing an order is assumed to be what?Read the answer and worked solution →In the EOQ model, what is the average stock held between full and empty?Read the answer and worked solution →Which expression gives total cost in the EOQ model?Read the answer and worked solution →Which input does the optimal EOQ NOT depend on?Read the answer and worked solution →A firm uses 1,000 units a year, pays Rs 20 per order and Rs 4 yearly holding per unit. Find the EOQ.Read the answer and worked solution →Yearly use 4,800 units, Rs 150 per order, Rs 4 carrying per unit a year. Economic order size?Read the answer and worked solution →At EOQ, how many orders a year for 2,000 units if orders cost Rs 10 and carrying Re 1 a unit?Read the answer and worked solution →Use 1,000 units a year, order cost Rs 20, carrying Rs 4 a unit. Ordering plus carrying cost at EOQ?Read the answer and worked solution →Annual demand rises fourfold, other inputs unchanged. What happens to EOQ?Read the answer and worked solution →Incremental discount: first 100 units Rs 30 each, units 101-199 Rs 28 each. Cost of 150 units?Read the answer and worked solution →All-units discount: up to 1,000 units Rs 50 each, 1,001-5,000 units Rs 45 each. Cost of 1,500?Read the answer and worked solution →A material is used at 80 units a day with a 12 day lead time. Reorder level without safety stock?Read the answer and worked solution →Usage is 40 units a day, lead time 15 days, safety stock 200 units. Reorder point?Read the answer and worked solution →Reorder point is forecast usage during lead time plus what?Read the answer and worked solution →Why is the reorder point above zero in real life?Read the answer and worked solution →Safety stock protects against shortages caused by what?Read the answer and worked solution →Delivery time stock is inventory needed during which period?Read the answer and worked solution →Efficient replenishment generally does what to the delivery time stock needed?Read the answer and worked solution →Usage is 50 units a day and lead time is 7 days. What is the reorder level?Read the answer and worked solution →ABC analysis divides inventory into how many categories?Read the answer and worked solution →Which items get very tight control and accurate records in ABC analysis?Read the answer and worked solution →Which class gets the simplest controls and minimal records?Read the answer and worked solution →ABC analysis resembles which principle, where few items carry most value?Read the answer and worked solution →Half of all items fall in class C. Roughly what share of consumption value do they hold?Read the answer and worked solution →

Worked practice questions

Goods cost Rs 600 but their NRV has fallen to Rs 570. At what value are they recorded?

  1. Rs 585
  2. Rs 570
  3. Rs 600
  4. Rs 30
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Correct answer: B. Rs 570

Under the lower of cost or market approach the decline is recognised, so stock is carried at the lower Rs 570.

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Stock at retail is Rs 20,000 and the cost to retail ratio is 60%. Estimated cost?

  1. Rs 33,300
  2. Rs 20,000
  3. Rs 12,000
  4. Rs 8,000
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Correct answer: C. Rs 12,000

Retail value multiplied by the cost ratio gives 20,000 times 0.60, which is Rs 12,000.

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Sales are Rs 500,000 and last year's margin was 30%. Estimated gross profit?

  1. Rs 30,000
  2. Rs 166,667
  3. Rs 150,000
  4. Rs 350,000
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Correct answer: C. Rs 150,000

Current sales times the earlier margin gives 500,000 times 30 percent, which is Rs 150,000.

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More Cost and Management Accounting topics

Cost SheetProcess CostingCost AccountingMarginal CostingEmployee CostActivity Based CostingBudgets and Budgetary ControlJob Costing