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John Moffat.
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xiiaolih
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If there is an scenario when the inventory currently having 200 kg but this material is not regularly used by the company and has disposal cost of $0.50 per kg. When we want to put this material into a special order will it still considered zero cost for the order on material?
John Moffat
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I don’t know what you mean by “zero cost for the order on material”.
The relevant cost is the opportunity cost – the lost income we could have received by selling it at 0.50 per kg.
All of this is explained in full in my free lectures on relevant costing. The lectures are a complete free course for Paper F5 and cover everything needed to be able to pass the exam well.
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