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Hi John!
I have an issue concerning relevant costing.
-There are over 3000 kg of material W already held in inventory. Material W is no longer in regular use by the company and could be sold for $1.5 per kg. It could also be used as a substitute for material Z, conversion costs of $1.6 per kg would have to be spent on material W. One kg of material w, after conversion would be a substitute for one kg of material Z.
-In the answer, the relevant cost is $2.4 per kg.
-How to obtain the answer?You have either not typed out the full question, or there is an error in your book.
It is impossible to answer as you have typed it – we need to know the cost of material Z per kg.
Sorry. I will re type the question.
There are over 3000 kg of material W already held in inventory. Material W is no longer in regular use by the company and could be sold for $1.5 per kg. It could also be used as a substitute for material Z. Material Z can be purchased for $4 per kg. Conversion costs of $1.6 per kg would have to be spent on material W. One kg of material w, after conversion would be a substitute for one kg of material Z.
-In the answer, the relevant cost is $2.4 per kg.
-How to obtain the answer?
- The topic ‘relevant costing’ is closed to new replies.