Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Required information [The following information applies to the questions displayed below.] Intercontinental's special order requires 1,300 kilograms of genatope, a solid chemical regularly used in

image text in transcribedimage text in transcribed

Required information [The following information applies to the questions displayed below.] Intercontinental's special order requires 1,300 kilograms of genatope, a solid chemical regularly used in the company's products. The current stock of genatope is 8,100 kilograms at a book value of 8.60 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 9.20 p per kilogram. Without the special order, the purchasing manager predicts that the price will be 8.80 p when normal restocking takes place. Any order of genatope must be in the amount of 6,900 kilograms. Required: 1. What is the relevant cost of genatope? (Enter your answer in pesos.) Total relevant cost 2. Identify the relevance of each of the figures given in the exercise in terms of making the special-order decision. |(a) Book value of inventory |(b) Quantity to be used in the special order (c) Predicted cost if next order is placed early (d) Predicted cost if next order is placed on time

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 Management A Complete Guide

Authors: Gerardus Blokdyk

2019 Edition

0655813640, 978-0655813644

More Books

Students also viewed these Accounting questions

Question

socialist egalitarianism which resulted in wage levelling;

Answered: 1 week ago

Question

soyuznye (all-Union, controlling enterprises directly from Moscow);

Answered: 1 week ago