Otool Inc. is considering using stocks of an old raw material in a special project. The special project would require all 160 kilograms of the raw material that are in stock and that originally cost the company $2,136 in total. If the company were to buy new supplies of this raw material on the open market, it would cost $8 per kilogram. However, the company has no other use for this raw material and would sell it at the discounted price of $7.05 per kilogram if it were not used in the special project. The sale of the raw material would involve delivery to the purchaser at a total cost of $85 for all 160 kilograms. What is the relevant cost of the 160 kilograms of the raw material when deciding whether to proceed with the special project?

Multiple Choice

• $1,043

• $1,128

• $1,234

• $1,240