Answer:
a). relevant cost=$38,500
b). relevant cost=$104,500
c). relevant cost=$66,000
d). relevant cost=$66,000
Explanation:
a).
Relevant cost for a rework cost of $3.50 per unit
relevant cost=rework cost per unit×number of units
where;
rework cost per unit=$3.50
number of units=11,000
replacing;
relevant cost=(3.5×11,000)=$38,500
b).
relevant cost=total rework cost+total manufacturing cost
total rework cost=rework cost per unit×number of units
total manufacturing cost=manufacturing cost×number of units
relevant cost=(rework cost per unit×number of units)+(manufacturing cost per unit×number of units)
where;
rework cost per unit=$3.50
number of units=11,000
manufacturing cost per unit=$6.00
number of units=11,000
replacing;
relevant cost=(3.50×11,000)+(6.00×11,000)=$104,500
c).
Rework cost and opportunity cost
relevant cost=(rework cost per unit×number of units)+(opportunity cost per unit×number of units)
where;
rework cost per unit=$3.50
number of units=11,000
opportunity cost per unit=$2.50
number of units=11,000
replacing;
relevant cost=(3.50×11,000)+(2.50×11,000)=$66,000
d).
Manufacturing cost and opportunity cost
relevant cost=(manufacturing cost per unit×number of units)+(opportunity cost per unit×number of units)
where;
manufacturing cost per unit=$3.50
number of units=11,000
opportunity cost per unit=$2.50
number of units=11,000
replacing;
relevant cost=(3.50×11,000)+(2.50×11,000)=$66,000
