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Studley Co. Purchased a Machine 3 years ago for $ 15,000. It can be sold now for $ 9,000. The current replacement cost of an equivalent machine is $ 14,000. If studley Co keeps the machine for use in the business it is expected to generate net income $ 17,000.
What is the relevant cost of the Machine?
Please make it clear as I’m confused regarding relevant costing of Non-Current Asset
You posted this question before, but then you asked what was the replacement cost of the machine! Now you are asking what the relevant cost is.
It is still impossible for me to answer because you have not given enough information. What is Studyley thinking of doing? Unless they are considering doing something then the question is irrelevant 🙂
Have you watched 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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