Question
Cleaning Corporation is preparing a bid for a special order of its best-selling cleaning solution. The cleaning solution would require 700 gallons of its secret
Cleaning Corporation is preparing a bid for a special order of its best-selling cleaning solution. The cleaning solution would require 700 gallons of its secret ingredient code named magic sauce. The company already has 640 gallons of magic sauce in stock that originally cost $8.30 per gallon. The resale value of the existing stock of magic sauce is $7.60 per gallon. New stocks of the magic sauce can be readily purchased for $8.35 per gallon. What is the relevant cost of the 700 gallons of the raw material when deciding how much to bid on the special order?
$5,810
$5,845
$5,320
$5,813
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