- December 4, 2021 at 12:13 pm #642483ismail21Member
- Topics: 1
- Replies: 1
Z PLC intends to use relevant cost as the basis of the selling price for a special order: the printing of a brochure. the brochure requires a particular type of paper that is not regularly used by Z plc although a limited leftover amount is in inventory . The cost when Z plc bought this paper last year was $ 15 per ream and there was 100 reams remaining. The brochure requires 250 reams . The current market price o the paper is $26 per reams and the resale value of the paper in inventory is $10 per reams. What 8s the relevant costDecember 5, 2021 at 7:34 am #642541John MoffatKeymaster
- Topics: 56
- Replies: 51576
Please do not simply type out full questions and expect to be provided with a full answer. You must have an answer in the same book in which you found the question and so in future ask about whatever it is in the answer that you are not clear about and I will explain.
They need 250 reams. 150 in is inventory and therefore using this has an opportunity cost of $10 per ream (the lost sale proceeds). The other 100 need to be purchased and therefore cost $26 per ream.
This is all explained in my free lectures on relevant costing.
- You must be logged in to reply to this topic.