Question
Buttimer Ltd is considering a short-term pricing decision for a contract that would utilise some material Beta that it has held in inventory for some
Buttimer Ltd is considering a short-term pricing decision for a contract that would utilise some material Beta that it has held in inventory for some time. The company does not foresee any other use for the material. The work would require 1,000 kgs of Material Beta. There are 800 kgs of Material Beta in inventory, which were bought some time ago at a cost of 3 per kg. The material held in inventory could currently be sold for 350 per kg. The current purchase price of Material Beta is 450 per kg.
The relevant cost of Material Beta for Buttimer Ltd to use when making its pricing decision for the contract is closest to
Select one:
a.
4,500
b.
3,500
c.
3,300
d.
3,700
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