E$19\mathrm{.}25$

Special order: manufacturer LO $19\mathrm{.}4,19\mathrm{.}5$

Refer to the data given in Exercise E$19\mathrm{.}24.$ International Chemical Company$$s special order also requires $750$ kilograms of genatope, a solid chemical regularly used in the company$$s products. The current stock of genatope is $6000$ kilograms at a carrying amount of $$12\mathrm{.}15$ per kilogram. If the special order is accepted, the firm will be forced to restock genatope earlier than expected, at a predicted cost of $$13\mathrm{.}05$ per kilogram. Without the special order, the purchasing manager predicts that the price will be $$12\mathrm{.}45$ when normal restocking takes place. The order size for genatope is $3750$ kilograms.

Required

What is the relevant cost of genatope?

Discuss each item of numerical data detailed in this exercise in terms of its relevance to the decision.