Please answer question B, note that the question is complete (a) One Cycle Limited (OCL) is a manufacturer of sports bicycles. The company uses Pirelli-P44Xtyres in its sports bicycles. The following information is provided in relation to Pirelli-P44Xtyres for the year 2021.V The annual demand for Pirelli-P44X tyres is 400,000 tyres.V The ordering cost per order is Kshs 10,500.V The Holding cost per unit of Pirelli-P44X tyre is Shs 158.Required;i) Calculate the Economic order Quantity (EOQ) for the Pirelli-P44X tyres using theinformation provided abovePage 1 of 5ii) Calculate the total ordering cost and the total holding cost if the reorder quantity is as perthe EOQ computed in (i) above.iii) Explain the trade-off that occurs between the ordering cost and the holding cost as theorder quantity increasesiv) Explain two assumptions of the Economic order Quantity (EOQ) _ (b) Explain how you would treat and record each of the following cost information whenpreparing the contract account for a construction contract of H.Young Itd a constructioncompany that has been operating in Kenya for the last three years.i) The company purchased building materials including cement.sand.paint.roofing tilesand other material at a cost of Shs 250,000,000ii) Some of the purchased building materials were defective and were returned to thesupplier. These materials had been purchased at a cost of Shs 23,000,000.iii) A huge fire at the contract site destroyed building materials valued at Shs 35,000,000iv) The company purchased a construction crane at a purchase cost of 20,000,000v) The company hired dynamics networking company to install electrical cables in thebuilding at a cost of 8,500,000vi) The manual construction workers hired for the contract during the year were paid45,000,000.

A contract account segregates financial information specifically related to a particular…

Explain how you would treat and record each of the following cost information when preparing the contract account for a construction contract of H.Young ltd a construction company that has been operating in Kenya for the last three years.

Explain how you would treat and record each of the following cost information when preparing the contract account for a construction contract of H.Young ltd a construction company that has been operating in Kenya for the last three years.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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