A company requires 600kg of raw material Z for a contract it is evaluating. It has 400kg
Question:
A company requires 600kg of raw material Z for a contract it is evaluating. It has 400kg of material Z in stock which were purchased last month. Since then the purchase price of material Z has risen by 8 per cent to £27 per kg. Raw material Z is used regularly by the company in normal production.
What is the total relevant cost of raw material Z to the contract?
(a) £15336
(b) £15400
(c) £16200
(d) £17496
(2 marks)
ACCA - Financial Information for Management
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