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bekas [8.4K]
2 years ago
14

Otool Incorporated is considering using stocks of an old raw material in a special project. The special project would require al

l 160 kilograms of the raw material that are in stock and that originally cost the company $1,936 in total. If the company were to buy new supplies of this raw material on the open market, it would cost $8 per kilogram. However, the company has no other use for this raw material and would sell it at the discounted price of $6.95 per kilogram if it were not used in the special project. The sale of the raw material would involve delivery to the purchaser at a total cost of $83 for all 160 kilograms. What is the relevant cost of the 160 kilograms of the raw material when deciding whether to proceed with the special project
Business
1 answer:
maxonik [38]2 years ago
7 0

The relevant cost of the 160 kilograms of the raw material when deciding whether to proceed with the special project  is $1,029.

<h3>Relevant cost</h3>

Using this formula

Relevant cost=(Numbers of kilogram of raw material × Discounted price per kilogram)- Delivery cost

Let plug in the formula

Relevant cost=( 160 kilograms× $6.95 per kilogram) -$83

Relevant cost=$1,112-$83

Relevant cost=$1,029

Therefore the relevant cost of the 160 kilograms of the raw material when deciding whether to proceed with the special project  is $1,029.

Learn more about relevant cost here:brainly.com/question/14041700

#SPJ12

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