Free stock represents what is really available for future use.
The free stock balances give better picture to the manager that how much stock needed for the current situation. So he can take decisions regarding the inventory.
Free stock is calculated as:-
Materials in stock X
Materials on order from suppliers X
Materials requisitioned, not yet issued (X)
Free stock balance X
Question: – Mick Ltd, a wholesaler has 8,500 units outstanding for material on existing customers orders; there are 4,000 units in stock. Order from supplier is 5,500.
Required:-
Calculate free stock for Mick Ltd?
Solution:-
Materials in stock 4000
Materials on order from suppliers 5500
Materials requisitioned, not yet issued (8500)
Free stock balance 1000
What is ' stock issued during month not previously allocated'
ReplyDeleteI want to know too
Delete