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Thornbury Ltd holds the following chemicals in inventories: V20 V40 No. of litres held 180 250 Purchase cost per unit 8 15 Net realisable value
Thornbury Ltd holds the following chemicals in inventories:
V20 | V40 | |
No. of litres held | 180 | 250 |
Purchase cost per unit | 8 | 15 |
Net realisable value | - | 12 |
Replacement cost | 10 | 16 |
The business has been asked to tender for a contract that requires 300 litres of V20 and 200 litres of V40. V20 is very toxic and, if not used for this particular job, the whole of the inventories will have to be disposed of safely at a cost of 200. The business no longer uses V40.
What is the relevant cost of the materials for the purpose of pricing the contract?
The relevant cost is . (round to full pounds).
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