1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Digiron [165]
3 years ago
6

Otool Inc. is considering using stocks of an old raw material in a special project. The special project would require all 150 ki

lograms of the raw material that are in stock and that originally cost the company $2,236 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 $7.10 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 $86 for all 150 kilograms. What is the relevant cost of the 150 kilograms of the raw material when deciding whether to proceed with the special project?
Business
1 answer:
frez [133]3 years ago
5 0

Answer:

The relevant cost of the 150 kilograms of the raw material when deciding whether to proceed with the special project: $979.

Explanation:

We do not use the original cost $2,236 because it is sunk cost.

We do not use market value because Otool Inc. does not either incur this cost nor sacrifice any benefit from not buying at market price.

The relevant cost of these raw material should be the benefit sacrificing from not selling the raw material, instead using it in the project; calculated as:

Selling price x Amount sold - Cost of delivery = 7.1 x 150 - 86 = $979.

Thus, the answer is $979.

You might be interested in
Sean McGowan renewed his membership at Bargain Barn. Shortly after renewing the card, Sean started receiving calls from collecti
34kurt

Answer:

Identity theft

Explanation:

Identity theft is when a person steals another person's information like name and credit card information and uses it to commit a crime. For example, a person can use someone else's name and social security number to get a loan. According to this, Sean experienced identity theft because someone stole his information and got a credit card under his name.

8 0
3 years ago
Which of the following statements is CORRECT?
Romashka [77]

Answer:

D. The threat of takeovers tends to reduce potential conflicts between stockholders and managers.

Explanation:

As with the threat of takeover, there comes the risk of losing control, power, monetary benefits, the stockholder's tend to agree with managers, and the manager's tend to agree with stockholders.

As both aims for no takeover of the company, both work in for each other, agreeing to the suggestions placed.

There is no dis-regard to any of the suggestions paid by any of the party. This threat actually creates moral harmony and unity among stakeholders and management.

Therefore, correct answer is:

D. The threat of takeovers tends to reduce potential conflicts between stockholders and managers.

8 0
3 years ago
Larkspur University sells 4,800 season basketball tickets at $60 each for the entire 15-game home schedule. (a) Give the entry t
snow_tiger [21]

Answer:

The Journal entry is as follows:

Cash A/c                    Dr. $288,000

To Unearned basketball ticket revenue A/c     $288,000

(To record the sale of the season tickets)

Workings:

Given that,

Total number of tickets sold = 4,800

Selling price of ticket = $60 each

Cash = season basketball tickets sold × Selling price of each ticket

        =  4,800 tickets × $60 per ticket

        = $288,000

5 0
3 years ago
:How is a ‘provision for reserve’ in a balance sheet, a liability or an asset. Explain.
Maslowich

Explanation:

A provision is indeed an item freed up from either a company's revenue to cover potential future costs or a probable property price decrease. It shows up as spending on the financial statements and is documented as a current liabilities.

3 0
2 years ago
Samantha is the store manager of a sporting goods store. A customer came in to return a fishing reel because the reel did not wo
Arturiano [62]
The type of account Samantha should recod the transaction is the contra account.
8 0
3 years ago
Other questions:
  • The following labor standards have been established for a particular product: Standard labor-hours per unit of output 10 hours S
    8·1 answer
  • What effect will this adjustment have on the accounting records?
    8·1 answer
  • Which methods predicts the amount by which the value of a firm will change if a project is accepted?
    8·1 answer
  • Herman Corporation had net income of $120,000 and paid dividends of $24,000 to common stockholders and $20,000 to preferred stoc
    11·1 answer
  • Flint Corporation traded a used truck (cost $21,600, accumulated depreciation $19,440) for a small computer with a fair value of
    5·1 answer
  • On January 1, 2020, Commonwealth Inc. leases equipment to Tap Inc. The equipment has a fair value of $156,000, a carrying value
    8·1 answer
  • Why do you think presidents must take an oath?
    9·1 answer
  • Knight Company reports the following costs and expenses in May.
    8·1 answer
  • Many people who do not smoke cigars are bothered by the odor of cigar smoke. If private contracting is impossible, will too many
    9·1 answer
  • A $15 cash payment is made to Starbucks to purchase coffee for a business client, a $64 cash payment is made for supplies purcha
    12·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!