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If material X is not in regular use and 300 k.g of material is in stock but 500 kg of material is required, what will be the relevant cost if the carrying value is $5 realiseable value is $3 and replacement cost is $7.
Reference: bpp kit q no. 20.9, pg-30.The 200 not in inventory is valued at replacement cost of $7 (so 1,400)
The 300 that is in inventory is valued at the realisable value of $3 (so 900).
So the total relevant cost is $2,300.
(If BPP have different then they are wrong. There are quite a lot of errors in both the BPP and the Kaplan revision kits this time.)
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