Asked by Furqaan Sayed on May 05, 2024
Verified
Schickel Inc.regularly uses material B39U and currently has in stock 460 liters of the material for which it paid $3,128 several weeks ago.If this were to be sold as is on the open market as surplus material, it would fetch $5.95 per liter.New stocks of the material can be purchased on the open market for $6.45 per liter, but it must be purchased in lots of 1,000 liters.You have been asked to determine the relevant cost of 760 liters of the material to be used in a job for a customer.The relevant cost of the 760 liters of material B39U is:
A) $4,902
B) $4,672
C) $4,522
D) $6,450
Open Market
A market with few restrictions on buy-sell transactions, allowing for free competition and prices dictated by supply and demand.
Surplus Material
Excess materials that are left over after the production process or not used within an operation.
Material B39U
is a specific type of raw material, possibly designated for use in a specialized manufacturing process, but without further context, its exact nature is unclear.
- Comprehend the principles of pertinent and immaterial costs in the context of making decisions.
Verified Answer
Learning Objectives
- Comprehend the principles of pertinent and immaterial costs in the context of making decisions.
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