- This topic has 1 reply, 2 voices, and was last updated 6 years ago by .
Viewing 2 posts - 1 through 2 (of 2 total)
Viewing 2 posts - 1 through 2 (of 2 total)
- The topic ‘working capital management’ is closed to new replies.
OpenTuition recommends the new interactive BPP books for June 2024 exams, Get your discount code >>
Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FM Exams › working capital management
Hello
Sir in chapter 4 e.g 1 and e.g 2 while calculating inventory cost per annum, we have not included purchase cost. However, in e.g 3 we have included purchase cost while calculating inventory cost per annum. Why is that so?
In the first two examples, the total purchase cost over the year remains the same and it is therefore irrelevant as far as the decision is concerned.
In the third example, the total purchase cost over the year changes (because of the discount) and therefore it is relevant for the decision.
I do explain this in the free lectures.