Ch 5Cost of Materials — Class 11 Costing and Taxation, concept-first.

Once materials are purchased and received into the factory, they must be properly stored, recorded, and accounted for until they are actually issued for production.

Where should a factory keep its stores — in one single central location, or spread across several departmental stores close to where materials are actually used? Both arrangements are followed in prac…

Materials Control is the systematic control exercised over the purchasing, storing and using of materials, so that there is a regular, uninterrupted supply of material for production, without either r…

Every time a fresh purchase order is placed, the business incurs an ordering cost (paperwork, follow-up, inspection, etc.), and every unit of material kept in store for a period of time incurs a carry…

When materials are purchased at different times, they are very often bought at different rates. Once these differently-priced lots are mixed together in the store, a question arises: when material is…

This set of questions checks your understanding of storing materials (Bin Card, Stores Ledger, Centralized vs Decentralized Stores), materials control and the fixation of stock levels, Economic Order…