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Material Costing Summary Notes $9.49   Add to cart
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Material Costing Summary Notes
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  • Course
  • CFA
  • Institution
  • CFA (CFA)

Summary Notes for fast and comprehensive revision. It includes the formula and the basic concepts of the related topic. Helpful for last day revision of important topics of important chapters.

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Document information

  • November 23, 2024
  • 2
  • 2024/2025
  • Summary

Subjects

  • ca intermediate
  • employee costing
  • material costing
  • abc analysis
  • last day revision notes
  • one day revision
  • formula and application
  • cost and management accounting
  • cfa

Written for

  • CFA
All documents for this subject (268)

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ddhruvaamish96

Content preview

MATERIAL COST


Material Cost



what is cost How much to When to Stock valuation
of material purchased purchase & control



How much to purchase
A → Annual Purchase Requirement

Q → No. of units to be purchased at a time

C.P.U → Cost per unit

O → ordering cost per order

C → Carrying cost per unit per anum

T.O → Total Orering cost per anum

→ A
xO
Q

T.C → Total carrying cost per annum

→ Q
xC
2

PC = A x C.P.U
TAC = TO + TC +PC

When to purchase
→ Stock levels
Re-order Level = (Maximum Consumption x Maximum lead time)+ safety stock

Max. Stock Level = Rol - (minmum cons x minmum lead time) + ROQ

Min. Stock Level = Rol - (Avg. cons x Avg Lead time)

Avg stock level = Max stock + Min stock
2
Alternative
Min stock level = ROL - (Avg cons x Avg load fix)


ROL = Min stock level + (Avg cons x Avg load hr)


1

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