Hamby Corporation is preparing a bid for a special order that would require 780

Question

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? A) $6,481 B) $6,376 C) $6,513 D) $5,928

Explanation / Answer

Hi, Please find the calculations as follows: =8.35*780 = 6513 Option C is correct. Thanks, Aman

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