Interview Questions.

Top 100+ Material Cost Interview Questions And Answers

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Top 100+ Material Cost Interview Questions And Answers

Question 1. What Are The Steps In Procurement Of Material?

Answer :

Following are the stairs in procurement of fabric:

Purchase Requisition is a sign to the acquisition branch to purchase sure material required for the production. Following details seem in the acquisition requisition

Material to be purchased
When it is required
How a great deal to be purchased
Selection of Source of Supply
Single Tender
Limited Tender
Open Tender
Global Tender
Purchase Order
Description of Materials to be supplied
Quantity to be provided
Cash and change bargain Rates at which materials are supplied
Additional costs e.G. Excise duty, Sales tax, packing fees, insurance Instructions in appreciate of transport
Guarantee clause
Inspection clause
Method of agreement of disputes
Terms of price Receipt and Inspection
After the receipt of substances, inspection of the fabric is achieved. Inspection of materials  method that the amount definitely received is as compared with the amount ordered; additionally the excellent of the cloth is inspected.
Question 2. How Do You Calculate The Following Inventory Levels?

Answer :

Re-order degree = Maximum Lead Time x Minimum Lead Time
Maximum stage = Reorder Level + Reorder Quantity – (Minimum Usage x Minimum Lead Time)
Minimum level = Reorder Level – (Normal Usage x Normal Lead Time)
Danger stage = Maximum Level x Lead time for Emergency purchases
Cost Accounting Interview Questions
Question 3. What Is Abc Analysis? Explain. What Are Its Advantages?

Answer :

ABC analysis method ‘Always Better Control’ is a method which classifies the numerous items of stock in keeping with their importance. It is an analytical technique of stock control which concentrates on the most extensive stock objects. For example: A elegance consists of these objects which might be much less in number but most critical in nature. B class consists exceptionally much less important gadgets. C class consists of massive variety of items which can be much less critical. The importance of numerous items is decided on the idea of following factors:

Critical nature of stock
Amount of funding
Value of material consumed.
Question 4. Explain Bills Of Materials?

Answer :

Bill of materials: is the listing of all materials which include all of the info and amount as required for a job or production method. This is prepared by means of the production department as quickly as the order for the process is acquired. This also ensures right stock manage. It gives an illustration to the purchase branch approximately the substances to be bought if there may be any shortage of material in the shops. A invoice of cloth prepared in advance serves a base for quoting the charge of the process.

Question five. Explain Perpetual Inventory System?

Answer :

Perpetual stock machine: is a machine under which non-stop stocking takes region. This system is implemented by way of the massive production devices. It pursuits at keeping bin playing cards and stores ledgers to recognise the amount and fee of the inventory at any factor of time which ensures that the bodily balance and the e book balance tallies. By systematically maintaining perpetual stock system discrepancies can be without difficulty positioned and can be adjusted in time. It additionally allow in locating slow and non-transferring items and to do so for the equal.

Materials control Interview Questions
Question 6. Why Should Over Stocking Be Avoided?

Answer :

Due to the following effects over stocking have to be averted:

Funds get blocked which might be used somewhere else
More garage facilities are required
High prices of garage and preservation
Deterioration of pleasant and obsolescence of inventory
High Insurance value More safety and protection measures.
Question 7. What Can Be The Consequences Of Under Stocking?

Answer :

The following can be the results of underneath stocking:

Production technique cannot be operated efficaciously, resulting shipping schedules.
Firm can also emerge as paying an idle labour force due to the production keep ups.
Organisation might also free its critical clients, due to the put off in meeting customers’ orders.
Unfavourable fees and fine Increased management costs.
Due to under stocking it's going to not be easy for the employer to fulfill the sudden demands of clients.
Marginal price Interview Questions
Question eight. Define Types Of Tenders-unmarried Tender,confined Tender,open Tender,international Tender?

Answer :

Single Tender : When handiest one source of supply is available then unmarried gentle is addressed to the chosen supplier.
Limited Tender : This sort of soft is addressed to a restrained range of suppliers, who are the dependable source of supply.
Open Tender : is open to all of the suppliers in the united states who can deliver the specified quantity and exceptional of materials. Such invitation is made by using advertising in newspapers, journals and many others.
Global Tender: is open to all and sundry from any part of the world to supply the required quantity and first-class of substances.
Question 9. What Can Be The Discrepancies In Material Receipt?

Answer :

There are two categories of cloth discrepancies:

First category consists of:

Quantity received in extra
Quantity obtained in quick
Quantity damaged
Receipt of wrong amount of material.
These discrepancies are generally caused by the transportation gadget.

Second class consists of:

Discrepancies in best of cloth furnished.
These discrepancies are caused by the manufacturer.

Standard Costing Interview Questions
Question 10. Differentiate Between Bin Card And Stores Ledger?

Answer :

Bin Card is a quantitative report of the character item of its receipts, problems and ultimate balance while Stores Ledger information both the amount and fee of receipts, issues and balances of object of fabric received.
Bin Card is prepared with the aid of stores department while Stores Ledger is ready via costing department.
In Bin Card gadget, entries are made at once after each transaction. In Store Ledger, entries are made periodically.
In Bin Card, postings are made earlier than a transaction. In Store Ledger, posting is made after a transaction.
Bin Card is stored connected to the boxes internal the store as to permit to discover the stock. Store Ledger is stored outdoor the shop.
Question eleven. What Can Be The Reasons For Bin Card And Stores Ledger Not Getting Reconciled?

Answer :

The following can be the reasons for bin card and shops ledger for now not getting reconciled:

Arithmetical blunders in calculating balances of the sheets.
If posting of the transaction has been made on incorrect bin card or shops ledger sheet.
If troubles transactions are handled as receipt transaction or vice versa, then this may create the distinction in each the balances.
Non posting of certain amount in any of the sheets.
Cost of products sold Interview Questions
Question 12. Explain Valuation Of Receipts?

Answer :

Valuation of receipts is the price billed inside the invoices by using the supplier. Following points must be kept in mind for this reason:

The change cut price is deducted from the simple fee and all different amounts as billed by means of the supplier are added, like excise duty, sales tax, octroi duty, and many others.
Joint costs may be allotted on the idea of the fundamental rate of the fabric.
In case of imported material, the price of the cloth includes a primary fee, customs obligation, clearing prices, delivery chares, and so forth.
Cost Accounting Interview Questions
Question 13. Explain Valuation Of Issues And Valuation Of Returns?

Answer :

Valuation of problems is a complex technique because the fabric may be issued out of various lots which might have been bought at numerous expenses. Following strategies are used for this motive:

- First in First out(FIFO)
- Last in First out (LIFO)
- Average Price Method
- Simple Average Method
- Weighted Average Method
- Highest in First out
- Market Price
- Specific Price
- Standard Price

Valuation of returns suggests the cloth back via the production department to stores department. This valuation is carried out on  foundation:

- At the equal fee at which issued
- At the present day charge of problems
Question 14. Explain Average Price Method ?

Answer :

Average Price Method: is the method via which the value of total property or prices is believed to be equal to the common price of the entire assets or charges. Under this technique, it's far assumed that the value of stock is primarily based on the average price of the products available for sale during the duration. It is computed by way of dividing the overall cost of products by the overall gadgets which gives a weighted common unit price for the units of the last stock.

Question 15. Explain Weighted Average Method ?

Answer :

Weighted Average Method: is the approach of calculation in which the weighted common of both the lot sizes as well as the prices of the lot. This method is excellent for valuing material problems. This method is very beneficial where the charges and quantities of objects vary. Practically, this technique is very simple to calculate.

Activity Based Costing Interview Questions
Question 16. What Are The Techniques Of Inventory Control?

Answer :

The strategies of inventory control are:

Economic Order Quantity
Fixation of Inventory Levels
Maximum Level
Minimum Level
Average Level
R e-order Level
Danger Level
Question 17. Explain Eoq?

Answer :

Economic Order Quantity (EOQ) is the quantity that's constant in one of these manner that the variable fees for dealing with the inventory may be minimized.

This includes  parts: Ordering Cost and Carrying Cost. Ordering price includes all of the prices associated with the administrative efforts connected with coaching of purchase requisitions, enquiries, submitting tenders, and comparative statements and so forth. That are incurred in ordering substances. Carrying value includes all of the prices which might be incurred in sporting or maintaining the inventory like godown rent, coverage handling charges etc. There is a inverse courting among ordering price and ordering price. An attempt must be made to balance both the prices, that is viable at Economic Order Quantity in which the total variable value of managing the stock is minimum.

Material Handler Interview Questions
Question 18. Explain The Term Fixation Of Inventory Levels Related To Inventory Levels?

Answer :

Fixation of stock levels : Fixation of inventory ranges facilitates smooth renovation and manipulate of diverse substances in a right way. However, following factors need to be remembered: Only fixation of stock ranges does now not facilitate inventory manage. A steady watch on the real inventory level of materials should be stored in order that right action may be taken in time The degrees which are constant aren't for permanent basis and are challenge to normal revision.

Materials control Interview Questions
Question 19. Explain The Term Maximum Level Related To Inventory Levels?

Answer :

Maximum level : This is the pinnacle degree which suggests that degree of material stock ought to not exceed this level. If it does, it can involve blocking off of funds in inventory which can be used for a few different beneficial functions.

This degree is fixed after thinking about following factors:

Maximum Usage
Lead Time
Storage facilities to be had
Prices of cloth
Other numerous charges concerned like coverage, storage cost and many others.
Availability of budget for procurement of substances
Nature of fabric
EOQ
Question 20. Explain The Term Minimum Level Related To Inventory Levels?

Answer :

Minimum level: This stage is fixed under the re-order level however above the risk stage. The level of inventory should not be decreased under this stage. If it does, then it entails the hazard of non availability of cloth each time required.

This stage is constant after thinking about  elements:

Rate of Consumption and Lead Time.
Material Cost Control Interview Questions
Question 21. Explain The Term Re-order Level Related To Inventory Levels?

Answer :

Re-order degree: This level is fixed between most and minimum stage in this kind of way that the requirement of materials for the production may be met properly till the fresh supply of fabric is obtained. This level of cloth stock shows that steps ought to be taken for procurement of further plenty of material.

Question 22. Explain The Term Danger Level Related To Inventory Levels?

Answer :

Danger stage: This level is constant underneath minimal degree. If the stock reaches this degree an instantaneous movement should be taken via the enterprise in respect of getting supply. This stage suggests a panic situation for the agency as it has to make purchases in a hurry which might also contain better costs.




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