Schickel Inc.regularly uses material B39U and currently has in stock 460 liters of the material for which it paid $3,128 several weeks ago.If this were to be sold as is on the open market as surplus material,it would fetch $5.95 per liter.New stocks of the material can be purchased on the open market for $6.45 per liter,but it must be purchased in lots of 1,000 liters.You have been asked to determine the relevant cost of 760 liters of the material to be used in a job for a customer.The relevant cost of the 760 liters of material B39U is:
A) $4,902
B) $4,672
C) $4,522
D) $6,450

Question

Quizplus · Accepted Answer

The relevant cost is the current market value: 760 liters × current market $6.45 per liter = $4,902