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12. Farraige Ltd produces skincare products using local harvested seaweed. It has been approached by a new customer and asked to produce a special-order facial
12. Farraige Ltd produces skincare products using local harvested seaweed. It has been approached by a new customer and asked to produce a special-order facial oil. If Farraige undertake the project, they will need to utilise a new piece of equipment for the project. They currently have a similar piece of equipment which is used to produce a cleanser in Division A, that could be transferred onto this special order but it would need to be modified at a cost of 5,000. This machine would then need to be replaced in Division A at a cost of 20,000. The alternative is to leave the machinery in Division A and purchase the required machine for 35,000 What is the relevant cost of the machine for costing this special order? (a) 5,000 (b) 35,000 (c) 25,000 (d) 60,000 ....Section A continues on the next page
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