The following information has been extracted from the books of AB Ltd. for the year ended 31st March, 2025: Particulars Material X Material Y…

(i) Calculation of quantity of each material purchased during the year and value of opening and closing stock. Material Consumed = Inventory Turnover Ratio × Average Stock Material X = 6 × 59,400 kg. = 3,56,400 kg. Material Y = 8 × 1,00,800 kg. = 8,06,400 kg. Average Stock = (Opening stock + Closing Stock) / 2 Let opening stock of Material X be A Kg. Closing stock of Material X will be = A + 10,800 59,400 = (A + A + 10,800) / 2 1,18,800 = 2 A + 10,800 2 A = 1,08,000 A = 54,000 Kg. Opening Stock X = 54,000 Kg. Closing Stock X = 54,000 + 10,800 = 64,800 Kgs. Let opening stock of Material Y be A Kg. Closing stock of Material Y will be = A + 28,800 1,00,800 = (A + A + 28,800) / 2 2,01,600 = 2 A + 28,800 2 A = 1,72,800 A = 86,400 = Opening Stock Y Closing Stock Y = 86,400 + 28,800 = 1,15,200 Kg. Purchases = Material Consumed + Closing Stock – Opening Stock Material X = 3,56,400 + 64,800 - 54,000 = 3,67,200 Kgs. Material Y = 8,06,400 + 1,15,200 - 86,400 = 8,35,200 Kgs. (ii) Number of days for which the average inventory is held: Number of Days in a year/ Inventory turnover ratio Material X = 360/6 = 60 days Material Y = 360/8 = 45 days (iii) Comments: Material Y is fast moving than that of Material X because it was held for 45 days against 60 days of X material.