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The Just in Time Company is currently considering a contract which requires the use of two types of materials.
Requirement for contract
Material A 10,000 Kg
Material B 5,000 Kg
5,000 kg of material B was purchased last week at $5 per kg. There only 2,000 kg of this material in store at present which are of no further regular. If not used, these materials will be sold for scrap at $1 per kg. The current purchase cost of material B is $5.50 per kg.
Question 1: Compute the relevant cost of Material B
Select one:
Option a. $18,500
Option b. $25,000
Option c. $2,000
Option d. $16,500
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