Question
Intercontinentals special order requires 1,600 kilograms of genatope, a solid chemical regularly used in the companys products. The current stock of genatope is 9,300 kilograms
Intercontinentals special order requires 1,600 kilograms of genatope, a solid chemical regularly used in the companys products. The current stock of genatope is 9,300 kilograms at a book value of 8.20 p per kilogram. If the special order is accepted, the firm will be forced to restock genatope earlier than expected, at a predicted cost of 8.80 p per kilogram. Without the special order, the purchasing manager predicts that the price will be 8.40 p when normal restocking takes place. Any order of genatope must be in the amount of 6,600 kilograms.
What is the relevant cost of genatope?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started