Your company regularly uses material X and currently has in stock 600kg, for which it paid 1500
Question:
Your company regularly uses material X and currently has in stock 600kg, for which it paid
£1500 two weeks ago. If this were to be sold as raw material it could be sold today for £2.00 per kg. You are aware that the material can be bought on the open market for £3.25 per kg, but it must be purchased in quantities of 1000 kg.
You have been asked to determine the relevant cost of 600 kg of material X to be used in a job for a customer. The relevant cost of the 600 kg is:
(a) £1200
(D) 21375
(C) 21825
(d) £1950 (e £3250.Appendix
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