Question
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
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