Knedler Corporation is preparing a bid for a special order that would require 72
ID: 2363047 • Letter: K
Question
Knedler Corporation is preparing a bid for a special order that would require 720 liters of material C01D. The company already has 200 liters of this raw material in stock that originally cost $9.90 per liter. Material C01D is used in the company's main product and is replenished on a periodic basis. The resale value of the existing stock of the material is $9.60 per liter. New stocks of the material can be readily purchased for $10.10 per liter. What is the relevant cost of the 720 liters of the raw material when deciding how much to bid on the special order? Answer $7,272 $6,972 $7,232 $6,912Explanation / Answer
2. Knedler Corporation is preparing a bid for a special order that would require 720 liters of material C01D. The company already has 200 liters of this raw material in stock that originally cost $9.90 per liter. Material C01D is used in the company's main product and is replenished on a periodic basis. The resale value of the existing stock of the material is $9.60 per liter. New stocks of the material can be readily purchased for $10.10 per liter. What is the relevant cost of the 720 liters of the raw material when deciding how much to bid on the special order?
A. $7,232
B. $7,272
C. $6,912
D. $6,972 33
Relevant cost of the raw material = 720 liters x $10.10 = $7,272
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.