Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Moyer Corporation is a specialty component manufacturer with idle capacity. Management would like to use its exta capactiy to generate additional profits. A potential customer

Moyer Corporation is a specialty component manufacturer with idle capacity. Management would like to use its exta capactiy to generate additional profits. A potential customer has offered to buy 2,300 units of component TIB. Each unit of TIB requires 9 units of material F58 and 7 units of material D66. Data concerning these two materials follow:

Material Units in Stock, Original cost/unit, Current market price/unit, Disposal value/ unit

F58 18,940 $4.40 $4.65 $4.35

D66 15,700 $6.10 $6.50 $4.80

Material F58 is in use in many of the company's products and is routinely replenished. Material D66 is no longer used by the company in any of its normal products and existing stocks would not be replenished once they are used up. What would be the relevant cost of he materials, in total, for the purposes of determining a minimum acceptable price for the order for product TIB?

A, 189,290

B. 200,905

C. 168,533

D. 174,215

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Audit Defense A Management Audit Readiness Guide

Authors: Ed Danter

1st Edition

3030924653, 978-3030924652

More Books

Students also viewed these Accounting questions