Question
A business purchased a tonne of material X at total cost of 3,000. The material is no longer used in business due not meeting specific
A business purchased a tonne of material X at total cost of £3,000. The material is no longer used in business due not meeting specific product quality criteria. Currently, it could be sold a scrap value of £1,000 immediately. Alternatively, it could be used as a substitute for another type of material Z that normally costs £6,000 per tonne to purchase. However, it will require £2,000 per tonne for further processing before it can be used as substitute. Current replacement cost for material X is £5,000.
Required:
What is the relevant cost of the material X per tonne?
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Management Accounting
Authors: Charles T. Horngren, Gary L. Sundem, William O. Stratton, Phillip Beaulieu
6th Canadian edition
013257084X, 1846589207, 978-0132570848
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