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Chick Co. is in the process of preparing a quotation for special job of a customer. The job
will require 120 units of material T. 120 units are already in inventory at a book value of
Rs. 40 per unit. The replacement price per unit is Rs. 68. The material is in inventory as the
result of previous over buying. It has no other useand the company has been informed that
it will cost Rs. 1.5 per unit to dispose of the material Tcurrently in inventory. Company also
know that if we want to scrap material Tthen Chick Co. have to bear transportation cost of
Rs. 0.5 per unit
Required:
Calculate the relevant cost of material Tand also discuss it.
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