A company requires two materials ‘M’ and ‘N’ for supplying the goods on a new order. The order requires 4000units of ‘M’ and 2000 units of ‘N’. The company presently has 2000 units of ‘M’ and 1000 units of ‘N’. The company no longer has any use for M and N. The company can sell the stock of “M’ for OMR 10 per unit. The raw material ‘N’ can be converted as 800 units of ‘P’ which costs RO 12 per unit. The company can also sell the stock of ‘N’ at OMR9 per unit. The current market price of ‘M’ and ‘N’ is OMR15 and OMR13 respectively. Calculate the relevant cost of the order.
A company requires two materials ‘M’ and ‘N’ for supplying the goods on a new order. The order requires 4000units of ‘M’ and 2000 units of ‘N’. The company presently has 2000 units of ‘M’ and 1000 units of ‘N’. The company no longer has any use for M and N. The company can sell the stock of “M’ for OMR 10 per unit. The raw material ‘N’ can be converted as 800 units of ‘P’ which costs RO 12 per unit. The company can also sell the stock of ‘N’ at OMR9 per unit. The current market price of ‘M’ and ‘N’ is OMR15 and OMR13 respectively. Calculate the relevant cost of the order.
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter17: Activity Resource Usage Model And Tactical Decision Making
Section: Chapter Questions
Problem 18E: A company is considering a special order for 1,000 units to be priced at 8.90 (the normal price...
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A company requires two materials ‘M’ and ‘N’ for supplying the goods on a new order. The order requires 4000units of ‘M’ and 2000 units of ‘N’. The company presently has 2000 units of ‘M’ and 1000 units of ‘N’. The company no longer has any use for M and N. The company can sell the stock of “M’ for OMR 10 per unit. The raw material ‘N’ can be converted as 800 units of ‘P’ which costs RO 12 per unit. The company can also sell the stock of ‘N’ at OMR9 per unit. The current market price of ‘M’ and ‘N’ is OMR15 and OMR13 respectively. Calculate the relevant cost of the order.
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