Material Cost Control Interview Questions & Answers

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Material Cost Control Interview Questions & Answers

Are you a financial expert who can estimate the material cost and work towards controlling it, then you are efficient enough to look for a Material Cost Control job. A Material Cost Control job will give you an experience of planning budgets, verifying the invoices and classifying the cost of the various materials used in any industry, so as to minimize the investment. To know more about the job description and responsibilities of a material cost controller, you can browse the wisdomjobs page. Here you will also find a list of various job opportunities available in this field. Based on your experience you can search and apply for the right job. To prepare you for the interview, we have made a set of Material Cost Control job interview questions and answers. You can read them and be sure to pass the interview easily with a promising job.

Material Cost Control Interview Questions

Material Cost Control Interview Questions
    1. Question 1. What Is Material Cost?

      Answer :

      Material control is a systematic control over purchasing, storing and consumption of materials, so as to maintain a regular and timely supply of materials, at the same time, avoiding overstocking.

    2. Question 2. What Do You Understand By Store Keeping?

      Answer :

      According to Alford and Beatty's store keeping is that aspect of material control concerned with the physical storage of good's. In other words,store keeping relates to art of preserving raw materials, work-in-progress and finished goods in the stores.

    3. Question 3. What Is The Necessity And Importance Of Material Control?

      Answer :

      • For knowing proper cost of production, control over materials is indispensable.
      • Certain techniques and methods are developed under the system of materials control thereby ensuring optimum utilisation of materials.
      • In order to undertake continuous checking of materials, the necessity of a proper system of materials control cannot be ignored.
      • A well managed system of materials control ensures the availability of different kinds of materials without delay.

    4. Question 4. What Does Inventory Turnover Ratio Indicates?

      Answer :

      The ratio indicates how quickly the inventory is used for production. Higher the ratio, shorter will be the duration of inventory at the factory. It is the index of efficiency of material management.

    5. Question 5. What Is Maximum Level?

      Answer :

      Maximum level is the level above which stock should never reach. It is also known as maximum limit's or maximum stock's. The function of maximum level is essential to avoid unnecessary blocking up of capital in inventories, losses on account of deterioration and obsolescence of materials,extra overheads and temptation to thefts etc. This level can be determined with the following formula. 

      Maximum Stock level = Reordering level + Reordering

    6. Question 6. What Is Industrial Purchasing?

      Answer :

      The purchaser is buying to convert material into finished product. It entails buying raw materials. Components,supplies and consumable stores,spares and tools,machines and equipment and office appliance.

    7. Question 7. What Is The Difference Between Centralized And Decentralized Storage?

      Answer :

      Centralized storage means a single store for the whole organisation, whereas decentralized storage means independent small stores attached to various departments.

    8. Question 8. What Is Minimum Level?

      Answer :

      It represents the lowest quantity of a particular material below which stock should not be allowed to fall. This level must be maintained at every time so that production is not held up due to shortage of any material.It is that level of inventories of which a fresh order must be placed to replenish the stock.

      This level is usually determined through the following formula:

      Minimum Level = Re-ordering level's

      (Normal rate of consumption x Normal delivery period)

    9. Question 9. What Are The Functions Of Store Keeping?

      Answer :

      The functions performed by the stores department are outlined below:

      • Issuing purchase requisitions to Purchase Department as and when necessity for materials in stores arises.
      • Receiving purchased materials from the purchase department and to confirm their quality and quantity with the purchase order.
      • Storing and preserving materials at proper and convenient places so that items could be easily located.
      • Storing the materials in such a manner so as to minimise the occurrence of Source

    10. Question 10. State The Requirements Of A System Of A Material Control?

      Answer :

      The important requirements or essentials of adequate and satisfactory system of material control are as follows:

      • Proper coordination
      • Competent Purchasing agent
      • Use of Standard Forms.
      • Control by budgeting material and Equipment.
      • Storage Location.

    11. Question 11. Explain Purchasing Process?

      Answer :

      Purchasing is the formal process of buying goods and services. The purchasing process can vary from one organization to another, but there are some common key elements.The process usually starts with a demand or requirements ? this could be for a physical part (inventory) or a service. A requisition is generated,which details the requirements (in some cases providing a requirements specification) which actions the procurement department. A request for proposal (RFP) or request for quotation

    12. Question 12. Name The Four Sections In The Process Of Store Keeping.

      Answer :

      There are four sections in the process of store keeping viz.

      •  Receiving section
      •  Storage section
      •  Accounting section
      •  Issue section.

    13. Question 13. What Is A Material Requisition?

      Answer :

      A materials requisition form is a source document that the production department uses to request materials for manufacturing process. The production manager usually fills out the materials requisition form and delivers it to the materials or storage department where all of the raw materials are stored.

    14. Question 14. What Are The Objectives Of Material Cost?

      Answer :

      The various objectives of material cost are as follows:

      •  To enable uninterrupted production.
      •  To ensure requisite quality of materials.
      •  To minimise wastage.
      •  To fix responsibility.
      •  To provide information.

    15. Question 15. What Is Perpetual Inventory System?

      Answer :

      In business and accounting/accountancy, perpetual inventory or continuous inventory describes systems of trading stock where information on inventory quantity and availability is updated on a continuous basis as a function of doing business.

    16. Question 16. What Is Periodic Inventory System?

      Answer :

      Periodic inventory is a system of inventory in which updates are made on a periodic basis. This differs from perpetual inventory systems, where updates are made as seen fit. In a periodic inventory system no effort is made to keep up-to-date records of either the inventory or the cost of goods sold.

    17. Question 17. How Is Economic Order Quantity Calculated?

      Answer :

       Q = v2AS/I

      where; Q stands for quantity per order ;

      A stands for annual requirements of an item in terms of rupees

      S stands for cost of placement of an order in rupees

      I stand for inventory carrying cost per unit per year in rupees.

    18. Question 18. State The Difference Between Perpetual And Periodic Inventory System?

      Answer :

      In perpetual inventory system, merchandise inventory and cost of goods sold are updated continuously on each sale and purchase transaction. 

      In periodic inventory system, merchandise inventory and cost of goods sold are not updated continuously.

    19. Question 19. Name The Types Of Purchases?

      Answer :

      • Personal Purchases
      • Mercantile Purchasing
      • Industrial Purchasing
      • Institutionalised or government purchasing

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