Munafo Corporation is a specialty component manufacturer with idle capacity. Management would like to use its extra capacity to generate additional profits. A potential customer has offered to buy 6,500 units of component VGI. Each unit of VGI requires 1 unit of material I57 and 5 units of material M97. Data concerning these two materials follow:MaterialUnits in StockOriginal Cost Per UnitCurrent Market Price Per UnitDisposal Value Per UnitI572,400$9.10$9.40$8.95M9733,960$4.70$4.70$3.50Material I57 is in use in many of the company's products and is routinely replenished. Material M97 is no longer used by the company in any of its normal products and existing stocks would not be replenished once they are used up.What would be the relevant cost of the materials, in total, for purposes of
determining a minimum acceptable price for the order for product VGI?
A. $174,850
B. $171,925
C. $213,130
D. $213,850
Answer: A
You might also like to view...
Costs that have been incurred in the past but are no longer relevant to decision making are ________
a. discontinued b. differential c. relevant d. sunk
JKL Distribution struggled to make profits for a few years, but eventually, the company had a very profitable year. Should the CEO raise salaries or give employees bonuses to reward them and motivate them to continue meeting company goals? Explain why.
What will be an ideal response?
An unclassified balance sheet provides more information to users than a classified balance sheet.
Answer the following statement true (T) or false (F)
The branch and bound method uses a tree diagram of nodes and branches to organize the solution partitioning
Indicate whether this statement is true or false.