Reference no: EM13585166

Alderon enterprises is evaluating a special order it has received for a ceramic fixture to be used in aircraft engines. Alderon has recently been operating at less than full capacity, so the firm's management will accept the order if the price offered exceeds the costs that will be incurred in producing it. You have been asked for advice on how to determine the cost of two raw materials that would be required to produce the order. (a) the special order will rewuire 800 plus gallons of endor, a highly perishable material that is purchased as needed. Alderon currently has 1,200 gallons of endor on hand, since the material is used i virtually a;; of the company's products. The last time endor was purchased, Alderon paid 5.00 per gallon. However, the average price paid for the endor in stock was only 4.75. The market price for endor is quite volatile, with the current price at 5.50. If the special order is accepted. Alderon will have to place a new order next week to replace the 800 gallons of endor used. By then the price is expected to reach 5.75 per gallon. using cost terminology, What is the real cost of endor if the special order is produced