Scherer Corporation Is Preparing a Bid for a Special Order

question 121

Multiple Choice

Scherer Corporation is preparing a bid for a special order that would require 720 liters of material U48N.The company already has 560 liters of this raw material in stock that originally cost $6.30 per liter.Material U48N 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 $5.80 per liter.New stocks of the material can be readily purchased for $6.65 per liter.What is the relevant cost of the 720 liters of the raw material when deciding how much to bid on the special order?

• A)$4,592
• B)$4,788
• C)$4,456
• D)$4,176

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Definitions:

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