Hamby Corporation is preparing a bid for a special order that would require 780 liters of material W34C. The company already has 640 liters of this raw material in stock that originally cost $8.30 per liter. Material W34C is used in the company's main product and is replenished on a periodic basis. The resale value of the existing stock of the material is $7.60 per liter. New stocks of the material can be readily purchased for $8.35 per liter. What is the relevant cost of the 780 liters of the raw material when deciding how much to bid on the special order?

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andromache andromache · Answer 1 · 2020-01-03T08:01:18+01:00

Answer:

$6,513

Explanation:

The computation of the relevant cost is shown below:

= Number of liters of the raw material × purchase of raw material per liter

= 780 liters × $8.35 per liter

= $6,513

Simply we multiplied the Number of liters of the raw material with the purchase of raw material per liter so that accurate amount can come

Any other information given is not important. Therefore, it was ignored