Inventory Control – NBC Institute

AA – Nov 2014 – L2 – Q3 – Planning an Audit

Outline the importance of audit planning and develop an audit strategy for Hurricane Ltd.

Question

Hurricane Limited

You are the audit manager in charge of the audit of Hurricane Limited. The company’s year-end is 31 December, and Hurricane Limited has been a client for seven years. The company purchases and resells fittings for ships, including anchors, compasses, rudders, sails, etc. Clients vary in size from small businesses making yachts to large companies maintaining large luxury cruise ships. No manufacturing takes place in Hurricane Limited.

Information on the company’s financial performance is available as follows:

Other Information:

i. The industry in which Hurricane Limited operates has seen moderate growth of 7% over the last year.

ii. Non-current assets mainly relate to company premises for storing inventory. Ten delivery vehicles are owned with a net book value of ₦300,000.

iii. One of the directors purchased a yacht during the year.

iv. Inventory is stored in ten different locations across the country, with your firm again having offices close to seven of those locations.

v. A computerized inventory control system was introduced in August 2013.

vi. Inventory balances are now obtainable directly from the computer system. The client does not intend to count inventory at the year-end but relies instead on the computerized inventory control system.

Required:

a. ISA 300 Planning an Audit of Financial Statements, states that an auditor must plan the audit.
Explain why it is important to plan an audit. (5 Marks)

b. Using the information provided above, prepare the audit strategy for Hurricane Limited for the year ending 31 December 2014. (15 Marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Audit Planning, Audit strategy, Inventory Control, ISA 300, Risk Assessment
Level: Level 2

Topic: Planning an Audit

AA – Nov 2015 – L2 – Q3c – Internal Control Systems

Describing the audit procedures necessary to ensure accurate recording and issuance of inventory at sales outlets.

Question

In respect of inventories held in the sales outlets, describe the audit procedures an auditor should perform to ensure that the inventories have been properly received, issued, and documented.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Audit Procedures, Inventory Control, Risk Management, Sales Outlets
Level: Level 2

Topic: Internal Control Systems
Series: NOV 2015

QTB – May 2015 – L1 – SA – Q13 – Operations Research

Identifying the meaning of the acronym EOQ in inventory control.

Question

The acronym EOQ in inventory control system stands for:

A. Economic Order Quantity
B. Economic Optimal Quantity
C. Equilibrium Optimal Quantity
D. Economic Ordering Quality
E. Equilibrium Ordering Quality

Answer

Find Related Questions by Tags, levels, etc.

Tags: Cost Minimization, Economic Order Quantity, Inventory Control
Level: Level 1

Topic: Operations Research
Series: MAY 2015

MI – May 2022 – L1 – SA – Q1 – Accounting for Cost Elements

Identify a cost that is not a carrying cost in inventory control from the list provided.

Question

Which of the following is NOT a carrying cost under inventory control?

A. Warehouse rent
B. Insurance cost
C. Stores staffing cost
D. Material handling cost
E. Set up and tooling cost

Answer

Find Related Questions by Tags, levels, etc.

Tags: Carrying Cost, Inventory Control, Management Information Systems
Level: Level 1

Topic: Accounting for Cost Elements
Series: MAY 2022

MI – Nov 2022 – L1 – SA – Q4 – Inventory Management

Calculation of Economic Order Quantity (EOQ) using given data

Question

What is the approximate Economic Order Quantity (EOQ) using the following data?
Annual consumption: 30,000 units
Ordering cost: ₦1,000
Purchase price: ₦20 per unit
Carrying cost: 5%

A. 7,746
B. 7,784
C. 7,858
D. 7,900
E. 7,943

Answer

Find Related Questions by Tags, levels, etc.

Tags: Carrying Cost, EOQ, Inventory Control, Ordering Cost
Level: Level 1

Topic: Inventory Management
Series: NOV 2022

MI – Nov 2022 – L1 – SA – Q3 – Inventory Management

Calculation of re-order level based on weekly consumption and delivery time

Question

Calculate the re-order level where consumption per week is 500-600 units, delivery time is 14-28 days:
A. 12,000
B. 12,500
C. 14,500
D. 15,000
E. 16,800

Answer

Find Related Questions by Tags, levels, etc.

Tags: Inventory Control, Re-order Level, Stock Management

Topic: Inventory Management
Series: NOV 2022

MI – Nov 2014 – L1 – SA – Q6 – Accounting for Cost Elements-

Calculate the maximum inventory level based on usage and lead time.

Question

PQR Limited has an average usage of 1,200 units of stamps, minimum usage of 800 units, and maximum usage of 2,000 units per day. If the lead time is 10 – 15 days and the previously calculated Economic Order Quantity is 6,000 units, calculate the Maximum Level.

A. 30,000 units
B. 28,000 units
C. 18,000 units
D. 15,000 units
E. 8,000 units

Answer

Find Related Questions by Tags, levels, etc.

Tags: EOQ, Inventory Control, Lead Time, Maximum Level
Level: Level 1

Series: NOV 2014

MI – Nov 2014 – L1 – SA – Q2 – Accounting for Cost Elements-

Identify which is NOT an advantage of centralized storage.

Question

The objectives of storing materials vary from one organisation to another. Which of the following is NOT an advantage of a centralized storage?

A. Stock taking is facilitated
B. Lower stock on average
C. Lower risk of duplication
D. Level of paper work is reduced
E. Loss of local knowledge from the user

Answer

Find Related Questions by Tags, levels, etc.

Tags: Centralized Storage, Inventory Control, Stock Management
Level: Level 1

Topic: Accounting for Cost Elements
Series: NOV 2014

BMIS – May 2016 – L1 – Q6b – Operations strategy

Explain Just-in-Time inventory control and state four advantages of its use in a manufacturing company

Question

i) Explain Just-in-Time inventory control.
ii) State FOUR advantages of its use in a manufacturing company.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Cost reduction, Inventory Control, JIT, Just-in-Time, Manufacturing Efficiency
Level: Level 1

Topic: Operations strategy
Series: MAY 2016

AA – Nov 2014 – L2 – Q3 – Planning an Audit

Outline the importance of audit planning and develop an audit strategy for Hurricane Ltd.

Question

Hurricane Limited

Information on the company’s financial performance is available as follows:

Other Information:

i. The industry in which Hurricane Limited operates has seen moderate growth of 7% over the last year.

ii. Non-current assets mainly relate to company premises for storing inventory. Ten delivery vehicles are owned with a net book value of ₦300,000.

iii. One of the directors purchased a yacht during the year.

iv. Inventory is stored in ten different locations across the country, with your firm again having offices close to seven of those locations.

v. A computerized inventory control system was introduced in August 2013.

Required:

a. ISA 300 Planning an Audit of Financial Statements, states that an auditor must plan the audit.
Explain why it is important to plan an audit. (5 Marks)

b. Using the information provided above, prepare the audit strategy for Hurricane Limited for the year ending 31 December 2014. (15 Marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Audit Planning, Audit strategy, Inventory Control, ISA 300, Risk Assessment
Level: Level 2

Topic: Planning an Audit

AA – Nov 2015 – L2 – Q3c – Internal Control Systems

Describing the audit procedures necessary to ensure accurate recording and issuance of inventory at sales outlets.

Question

In respect of inventories held in the sales outlets, describe the audit procedures an auditor should perform to ensure that the inventories have been properly received, issued, and documented.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Audit Procedures, Inventory Control, Risk Management, Sales Outlets
Level: Level 2

Topic: Internal Control Systems
Series: NOV 2015

QTB – May 2015 – L1 – SA – Q13 – Operations Research

Identifying the meaning of the acronym EOQ in inventory control.

Question

The acronym EOQ in inventory control system stands for:

A. Economic Order Quantity
B. Economic Optimal Quantity
C. Equilibrium Optimal Quantity
D. Economic Ordering Quality
E. Equilibrium Ordering Quality

Answer

Find Related Questions by Tags, levels, etc.

Tags: Cost Minimization, Economic Order Quantity, Inventory Control
Level: Level 1

Topic: Operations Research
Series: MAY 2015

MI – May 2022 – L1 – SA – Q1 – Accounting for Cost Elements

Identify a cost that is not a carrying cost in inventory control from the list provided.

Question

Which of the following is NOT a carrying cost under inventory control?

A. Warehouse rent
B. Insurance cost
C. Stores staffing cost
D. Material handling cost
E. Set up and tooling cost

Answer

Find Related Questions by Tags, levels, etc.

Tags: Carrying Cost, Inventory Control, Management Information Systems
Level: Level 1

Topic: Accounting for Cost Elements
Series: MAY 2022

MI – Nov 2022 – L1 – SA – Q4 – Inventory Management

Calculation of Economic Order Quantity (EOQ) using given data

Question

What is the approximate Economic Order Quantity (EOQ) using the following data?
Annual consumption: 30,000 units
Ordering cost: ₦1,000
Purchase price: ₦20 per unit
Carrying cost: 5%

A. 7,746
B. 7,784
C. 7,858
D. 7,900
E. 7,943

Answer

Find Related Questions by Tags, levels, etc.

Tags: Carrying Cost, EOQ, Inventory Control, Ordering Cost
Level: Level 1

Topic: Inventory Management
Series: NOV 2022

MI – Nov 2022 – L1 – SA – Q3 – Inventory Management

Calculation of re-order level based on weekly consumption and delivery time

Question

Calculate the re-order level where consumption per week is 500-600 units, delivery time is 14-28 days:
A. 12,000
B. 12,500
C. 14,500
D. 15,000
E. 16,800

Answer

Find Related Questions by Tags, levels, etc.

Tags: Inventory Control, Re-order Level, Stock Management

Topic: Inventory Management
Series: NOV 2022

MI – Nov 2014 – L1 – SA – Q6 – Accounting for Cost Elements-

Calculate the maximum inventory level based on usage and lead time.

Question

A. 30,000 units
B. 28,000 units
C. 18,000 units
D. 15,000 units
E. 8,000 units

Answer

Find Related Questions by Tags, levels, etc.

Tags: EOQ, Inventory Control, Lead Time, Maximum Level
Level: Level 1

Series: NOV 2014

MI – Nov 2014 – L1 – SA – Q2 – Accounting for Cost Elements-

Identify which is NOT an advantage of centralized storage.

Question

The objectives of storing materials vary from one organisation to another. Which of the following is NOT an advantage of a centralized storage?

A. Stock taking is facilitated
B. Lower stock on average
C. Lower risk of duplication
D. Level of paper work is reduced
E. Loss of local knowledge from the user

Answer

Find Related Questions by Tags, levels, etc.

Tags: Centralized Storage, Inventory Control, Stock Management
Level: Level 1

Topic: Accounting for Cost Elements
Series: NOV 2014

BMIS – May 2016 – L1 – Q6b – Operations strategy

Explain Just-in-Time inventory control and state four advantages of its use in a manufacturing company

Question

i) Explain Just-in-Time inventory control.
ii) State FOUR advantages of its use in a manufacturing company.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Cost reduction, Inventory Control, JIT, Just-in-Time, Manufacturing Efficiency
Level: Level 1

Topic: Operations strategy
Series: MAY 2016

Question Tag: Inventory Control

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AA – Nov 2014 – L2 – Q3 – Planning an Audit

Outline the importance of audit planning and develop an audit strategy for Hurricane Ltd.

You're reporting an error for "AA – Nov 2014 – L2 – Q3 – Planning an Audit"

AA – Nov 2015 – L2 – Q3c – Internal Control Systems

Describing the audit procedures necessary to ensure accurate recording and issuance of inventory at sales outlets.

You're reporting an error for "AA – Nov 2015 – L2 – Q3c – Internal Control Systems"

QTB – May 2015 – L1 – SA – Q13 – Operations Research

Identifying the meaning of the acronym EOQ in inventory control.

You're reporting an error for "QTB – May 2015 – L1 – SA – Q13 – Operations Research"

MI – May 2022 – L1 – SA – Q1 – Accounting for Cost Elements

Identify a cost that is not a carrying cost in inventory control from the list provided.

You're reporting an error for "MI – May 2022 – L1 – SA – Q1 – Accounting for Cost Elements"

MI – Nov 2022 – L1 – SA – Q4 – Inventory Management

Calculation of Economic Order Quantity (EOQ) using given data

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MI – Nov 2022 – L1 – SA – Q3 – Inventory Management

Calculation of re-order level based on weekly consumption and delivery time

You're reporting an error for "MI – Nov 2022 – L1 – SA – Q3 – Inventory Management"

MI – Nov 2014 – L1 – SA – Q6 – Accounting for Cost Elements-

Calculate the maximum inventory level based on usage and lead time.

You're reporting an error for "MI – Nov 2014 – L1 – SA – Q6 – Accounting for Cost Elements-"

MI – Nov 2014 – L1 – SA – Q2 – Accounting for Cost Elements-

Identify which is NOT an advantage of centralized storage.

You're reporting an error for "MI – Nov 2014 – L1 – SA – Q2 – Accounting for Cost Elements-"

BMIS – May 2016 – L1 – Q6b – Operations strategy

Explain Just-in-Time inventory control and state four advantages of its use in a manufacturing company

You're reporting an error for "BMIS – May 2016 – L1 – Q6b – Operations strategy"

AA – Nov 2014 – L2 – Q3 – Planning an Audit

Outline the importance of audit planning and develop an audit strategy for Hurricane Ltd.

You're reporting an error for "AA – Nov 2014 – L2 – Q3 – Planning an Audit"

AA – Nov 2015 – L2 – Q3c – Internal Control Systems

Describing the audit procedures necessary to ensure accurate recording and issuance of inventory at sales outlets.

You're reporting an error for "AA – Nov 2015 – L2 – Q3c – Internal Control Systems"

QTB – May 2015 – L1 – SA – Q13 – Operations Research

Identifying the meaning of the acronym EOQ in inventory control.

You're reporting an error for "QTB – May 2015 – L1 – SA – Q13 – Operations Research"

MI – May 2022 – L1 – SA – Q1 – Accounting for Cost Elements

Identify a cost that is not a carrying cost in inventory control from the list provided.

You're reporting an error for "MI – May 2022 – L1 – SA – Q1 – Accounting for Cost Elements"

MI – Nov 2022 – L1 – SA – Q4 – Inventory Management

Calculation of Economic Order Quantity (EOQ) using given data

You're reporting an error for "MI – Nov 2022 – L1 – SA – Q4 – Inventory Management"

MI – Nov 2022 – L1 – SA – Q3 – Inventory Management

Calculation of re-order level based on weekly consumption and delivery time

You're reporting an error for "MI – Nov 2022 – L1 – SA – Q3 – Inventory Management"

MI – Nov 2014 – L1 – SA – Q6 – Accounting for Cost Elements-

Calculate the maximum inventory level based on usage and lead time.

You're reporting an error for "MI – Nov 2014 – L1 – SA – Q6 – Accounting for Cost Elements-"

MI – Nov 2014 – L1 – SA – Q2 – Accounting for Cost Elements-

Identify which is NOT an advantage of centralized storage.

You're reporting an error for "MI – Nov 2014 – L1 – SA – Q2 – Accounting for Cost Elements-"

BMIS – May 2016 – L1 – Q6b – Operations strategy

Explain Just-in-Time inventory control and state four advantages of its use in a manufacturing company

You're reporting an error for "BMIS – May 2016 – L1 – Q6b – Operations strategy"

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