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Chineke Ltd is considering the costs to be incurred in respect of a special-order opportunity. The order would require 300 kgs of material A, that
Chineke Ltd is considering the costs to be incurred in respect of a special-order opportunity. The order would require 300 kgs of material A, that is readily available and regularly used by the organisation on its normal products. There are 265 kgs of material A in inventory which cost NS3.01 per kg when it was purchased. The current market price is NS3.50 per kg and its resale value is N$3.02. Material A is normally used to make product XY. Each unit of XY requires 3 kgs of material A, and if material Ais costed at N$4 per kg, each unit of X yields a contribution of N$16. Required: What is the relevant cost of material A to be included in the costing of the special order? NB: You are not required to enter the unit or currency symbol. Enter a numerical answer with no space. For example: 1000
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