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Student Exercise Six

The document contains self-review questions, exercises, and examination questions related to material control, purchasing procedures, stocktaking, and storekeeping. It emphasizes the importance of understanding the essentials of material control and the factors influencing storage decisions in a manufacturing context. Additionally, it outlines practical scenarios for students to apply their knowledge in real-world situations.

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charleschirwa05
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21 views1 page

Student Exercise Six

The document contains self-review questions, exercises, and examination questions related to material control, purchasing procedures, stocktaking, and storekeeping. It emphasizes the importance of understanding the essentials of material control and the factors influencing storage decisions in a manufacturing context. Additionally, it outlines practical scenarios for students to apply their knowledge in real-world situations.

Uploaded by

charleschirwa05
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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STUDENT SELF-TESTING

Self Review Questions

1. What are the essentials of material control? (2) 2. Outline the main steps in the Purchasing Procedure.
(5) 3. Where does the Goods Received Note (GRN) originate and what is its purpose? (6) 4. What are the
major activities involved in storekeeping? (7) 5. What is Periodic and Continuous Stock taking? (9): 6. In
what circumstances is it essential to use continuous stocktaking? (9) 7. What are the advantages and
disadvantages of centralised storage? (10)

Exercises (answers begin page 480) Al. Invariably goods, services and the supply of materials are
obtained by the use of a Purchase Order. Design the layout of a Purchase Order, showing what essential
_ information the order should contain.

A2. Give six advantages of continuous stocktaking.

Examination Questions (answers begin page 480) A3. A manufacturing company has a high growth
record and is unable to wee the demand for its products. It is unable to expand its production facilities
on its present site, so is planning to move to a development area where it can build a factory which will
be much Jarger than its existing factory. As cost accountant you have been asked to help in the planning
stage and your particular responsibility is for the planning of a new store for raw materials and
components. ; : You are required to state the factors to be considered in respect of the following: a.
centralised or de-centralised stores; b. the use of a continuous stock-taking system; c. the layout of
stores. (ICMA, Cost Accounting. 1, Nov. 1974.)

A4. The manufacturing company by which you are employed has just taken a six monthly physical check
of all its stocks. The valuations of this physical stock-taking differs considerably from balances at the
stock-taking date shown in the stock accounts in the ledger. You are required to state the steps you
would take to investigate how the differences had arisen so that an accurate stock value may be
obtained. (ICMA, Financial Accounting 2, Nov. 1979.)

A5. Outline the accountant’s contribution to the process of material cost control in a manufacturing
organisation where material is a significant element of total cost. (ACCA,. Costing, June 1980.)

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