Question
4 (3 Marks) Ahmed Ali Khan Corporation is a food manufacturer with extra capacity. A potential customer has offered to buy 3,000 units of gol
4 (3 Marks) Ahmed Ali Khan Corporation is a food manufacturer with extra capacity. A potential customer has offered to buy 3,000 units of gol gappas. Each unit of gol gappa requires 11 units of material "Chatni" and 5 units of material "Sooji". Data concerning these two materials follow: Material Chatni Sooji Units in Stock 740 Original Cost Per Unit Current Market Price Per Unit Disposal Value Per Unit Rs.4.90 13,680 Rs.5.00 Rs.4.75 Rs.4.70 Rs.4.20 Rs.3.60 Chatni is in use in many of the company's products and is routinely replenished. Sooji is no longer used by the company in any of its normal products and the company would not be needing it in its other manufacturing later. While thinking about what should be the price of those 3,000 units of gol gappas, we need to add cost of materials to find total cost of manufacturing this product. What should be the cost (including opportunity cost) of these materials that should be added to the manufacturing cost of Gol Gappas
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