SafeLife Incorporated has been producing candles with an added ingredient that was advertised to rid the surrounding air of any COVID-19 virus particles. Due to several viral social media posts challenging the effectiveness of their claim, the company is no longer producing the candles. Safelife is considering using their existing inventory of wax for a special project, which would require all 160 containers of the wax that are in stock. In total, these containers originally cost the company $2,336. If SafeLife purchased containers of this wax on the open market, they would have to pay $8 per container. However, SafeLife has no other use for the containers of wax. If they do not proceed with the special project, SafeLife would sell the containers at the discounted price of $7.15 per container, plus they would have to pay delivery costs to the purchaser totaling $87 for all 160 containers. As SafeLife is considering the special project, what is the relevant cost of the 160 containers of wax?

SafeLife Incorporated has been producing candles with an added ingredient that was advertised to rid the surrounding air of any COVID-19 virus particles. Due to several viral social media posts challenging the effectiveness of their claim, the company is no longer producing the candles. Safelife is considering using their existing inventory of wax for a special project, which would require all 160 containers of the wax that are in stock. In total, these containers originally cost the company $2,336. If SafeLife purchased containers of this wax on the open market, they would have to pay $8 per container. However, SafeLife has no other use for the containers of wax. If they do not proceed with the special project, SafeLife would sell the containers at the discounted price of $7.15 per container, plus they would have to pay delivery costs to the purchaser totaling $87 for all 160 containers. As SafeLife is considering the special project, what is the relevant cost of the 160 containers of wax?

Principles of Cost Accounting

17th Edition

ISBN:9781305087408

Author:Edward J. Vanderbeck, Maria R. Mitchell

Publisher:Edward J. Vanderbeck, Maria R. Mitchell

Chapter10: Cost Analysis For Management Decision Making

Section: Chapter Questions

Problem 14P

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