Global Chemical Company, located in Buenos Aires, Argentina, recently received an order for a product it does not normally produce. Since the company has excess production capacity, management is considering accepting the order. In analyzing the decision, the assistant controller is compiling the relevant costs of producing the order. Production of the special order would require 8,100 kilograms of theolite. Global does not use theolite for its regular product, but the firm has 8,100 kilograms of the chemical on hand from the days when it used theolite regularly. The theolite could be sold to a chemical wholesaler for 15,400 p. The book value of the theolite is 2.40 p per kilogram. Global could buy theolite for 2.80 p per kilogram. (p denotes the peso, Argentinas national monetary unit. Many countries use the peso as their unit of currency. On the day this exercise was written, Argentinas peso was worth .1891 U.S. dollars.)

Required information

Required:
1-a.	What is the relevant cost of theolite for the purpose of analyzing the special-order decision?
	Answer is in pesos no need to convert.

1-b.

The relevant cost of theolite for the purpose of analyzing the special-order decision is an example of: Choose ONE

	Sunk cost
	Historical cost
	Opportunity cost

Required information

1-c.	Identify the relevance of each of the numbers given in the exercise in making the decision.
	Choose Relevant or Irrelevant for each item Sales Value: Book Value: Current purchase price: