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could somebody please explain me the solution step by step, because I dont know how they calculated that. thanks :) Myddie Limited is a small
could somebody please explain me the solution step by step, because I dont know how they calculated that. thanks :)
Myddie Limited is a small specialist manufacturer of components used in the manufacture of aircraft, Myddie Limited has been asked to supply 450 identical components to one of its major customers over the next year, and is deciding whether to accept the order. Each component uses 7kg of tin. Myddle Limited currently has inventories of 9,000kg of tin, which were bought at a cost of 4 per kg. The current replacement cost of tin is 5 per kg. Future purchases of tin are likely to be at 6 per kg Inventories of tin have not been used for several years. Its scrap value is 3.90 per kg. The only foreseeable alternative use is as a substitute for zinc (in constant use) but this would involve further processing costs of 6.40 per kg. The current cost of zinc is 11.52 per kg At what price should the tin be included in calculations of the relevant costs of accepting the order? (Complete the necessary drop down and answer box) The relevant cost to be included in the price calculations is: Relevant price (E) Opportunity cost of using tin to replace zinc 16,128 Which one of the following is a relevant cost for financial decision-making purposes? A. Opportunity cost B. Past cost C. Committed cost D. Outlay cost that does not vary with the decision being made Step by Step Solution
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