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Hello Sir,
just wanted to ask you about the question no.2 as in my opinion the answer was 17000(500*10)+(1500*8).I am not getting the concept of 2000*10
as 500 units have to be purchased and inventory is to be used for the new work.Kindly explain.Thanks in advanceThe material in inventory is in regular use. Therefore if it is used in the contract it will need to be replaced and replacing it will cost $10 per kg.
This is all explained in my free lectures on relevant costing. The lectures are a complete free course for Paper PM and cover everything needed to be able to pass the exam well.
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