A company purchased a machine several years ago for £79,000. Its written down value is now £37,000. The machine is no longer used on normal production work and it could be sold now for £8,000. A one-off contract is being considered which would make use of this machine for six months. After this time the machine would be sold for £6,000.
What is the relevant cost of the machine to the contract?
For my calculation will be the following: Sold now $8,000 Cost of disposing $6,000
relevant cost will be nil, is because relevant costing is excluding the loss of disposal. But it seems like the answer is wrong.