Dear John, the question as shown as follows:
material quantity required inventory value/kg realizable value replacement cost/kg
W 500kg 0 - - 8
X 500kg 300kg 5 3 7
Y 500kg 400kg 8 9 11
Z 100kg 100kg 10 12 15
material Y is in regular use by the company. Materials X and Z are no longer in regular use. there is no alternative use for Material X but the 100kg of material Z could be used instead of 150 kg of material V on a different job. material V costs $9 / kg and there is currently none of this material in inventory.
what is the relevant cost of these material for the job under consideration?
the X which I did is that (300*3+200*7), but the answer is that (500*3), I don't know why?
many thanks
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relevent costs
You are correct for material X.
It is in the BPP Revision Kit and it is a mistake in their answer (there are several mistakes in the Revision Kit this time, which is annoying - at least BPP has fewer mistakes than the Kaplan one!)
thank you so much
You are welcome :-)
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