Accounting for material

Hi. To answer this question, you have to know 2 things: 1. how compute the total amount needed for the required production 2. the formula which calculates the material purchases, which is as follows: Mat'l Purchases=Mat'l Usage + closing bal - opening bal. Lets do this: 1. 1a. Input -wastage = output. this shd make sense to u. 1b. Now, if one unit takes in 1.8kg, you need 2000 x 1.8=3600 kg of material. 1c. what will be actual material u need to account for the 10% wastage? to answer this, lets apply the formula: input - wastage = output input - 10% x input = output 0.9 x input= 3600 input = 3600/0.9=4000 kg (you can check the answer by deducting 10% of 4000 and see u get 3600) 2. No we apply the formula that you learnt in MA1 paper: Mat'l purchases = mat'l usage + cl bal - op bal Mat'l Purchases = 4000 + 500 - 420 = 4080 hope this helps

Thank you so much kind sir!!! I didn’t think that you’d need to compensate the weight loss of the material by preparing more material than is required. I totally understand now. Yes it has indeed helped me a lot and it was very easy to understand. You seem to be really good at material costing. I am very grateful for your help.

cool

how do u get the 0.9

input – 10% x input = output "input" is a variable... i cd have written it as x - 10%x = output x - 0.1x = output x(1-0.1) = output 0.9x=output

i also confuse why is 0.9 thanks mansoor explaine ?but izit have more easier way to calculate the 0.9?

I am still confused how u get 0.9 plss explain

Think: Input weight - wastage = output weight If there is a 10% weight loss, then if you input 1kg the weights will be: 1 - 0.1 = 0.9 So, to get a weight of 0.9 out you need to put in 1 To get 9 out you need to put in 10 To get 18 out you need to put in 20 To get 45 out you need to put in 50 [50 - 10% x 50 = 45] in all cases to move from output weight to input weight you have to divide the output weight by 0.9 eg 45/0.9 = 50. To get 630 out you would need to put in 630/0.9 = 700. [Check: 700 - 10% x 700 = 630]

IT HELPS ME ALOT

10% of input which 1.8 kg raw material is 0.18kg so by this to cover the loss we need 1.98 kg raw material per unit by this answer gets 4040 which is wrong i dont understand how 2 comes

The 10% is how much of the input material is lost. In your answer, if you input 1.98 and lose 10% you will end up with 1.98 - 0.198 = 1.782, not the 1.8 you need. 1.8 represents what you are left with after losing 10% of the input, so it represents 90% of input. Total input is therefore 1.8/0.9 = 2. Check: input 2, lose 10% and you are left with the required 1.8.