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 6 units of material "Chatni" and 5 units of material "Sooji". Data concerning these two materials follow: Material Units in Original Cost Per Current Market Price Disposal Value Chatni Sooji Stock 740 Unit Per Unit 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
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started