Janus Corporation Has in Stock 43,700 Kilograms of Material L

question 75

Multiple Choice

Janus Corporation has in stock 43,700 kilograms of material L that it bought five years ago for $6.10 per kilogram.This raw material was purchased to use in a product line that has been discontinued.Material L can be sold as is for scrap for $3.23 per kilogram.An alternative would be to use material L in one of the company's current products,E99D,which currently requires 2 kilograms of a raw material that is available for $9.45 per kilogram.Material L can be modified at a cost of $0.62 per kilogram so that it can be used as a substitute for this material in the production of product E99D.However,after modification,3 kilograms of material L is required for every unit of product E99D that is produced.Janus Corporation has now received a request from a company that could use material L in its production process.Assuming that Janus Corporation could use all of its stock of material L to make product E99D or the company could sell all of its stock of the material at the current scrap price of $3.23 per kilogram,what is the minimum acceptable selling price of material L to the company that could use material L in its own production process?

• A)$3.23
• B)$5.68
• C)$6.92
• D)$2.45

---

Definitions:

Hypothalamus

A region of the brain responsible for the regulation of certain metabolic processes and other activities of the autonomic nervous system, including temperature control, hunger, and thirst.

Pima Indians

A group of Native American people living in Arizona and Sonora, Mexico, known for their unique genetic composition and high prevalence of diabetes in medical studies.

Diet

The usual food and drink consumed by an individual or group, often considered in terms of its quality, composition, and its effect on health.

Stress Levels

The intensity of stress reactions within an individual, which can impact mental and physical health.