Relevant cost of materials

Assignment Help Managerial Accounting

Reference no: EM1349986

Roddey Corporation is a specialty component manufacturer with idle capacity. Management would like to use its extra capacity to generate additional profits. A potential customer has offered to buy 2,900 units of component GEE. Each unit of GEE requires 3 units of material R39 and 8 units of material I59. Data concerning these two materials follow:

material units original cost current market disposal value per
in stock per unit price per unit unit

R39 340 $4.70 $4.35 $3.95
I59 23,700 $8.20 $8.05 $6.85

Material R39 is in use in many of the company's products and is routinely replenished. Material I59 is no longer used by the company in any of its normal products and existing stocks would not be replenished once they are used up.

What would be the relevant cost of the materials, in total, for purposes of determining a minimum acceptable price for the order for product GEE?

Reference no: EM1349986

Questions Cloud

Global and diversity implications : Also, what are global and diversity implications or areas of concern in this field of psychology?

Explain what is a marketing plan and what lies at its center : Explain What is a marketing plan and What lies at its center and What objectives should a marketing plan accomplish and How can market research benefit a small business owner

Conduct action research : Suppose you are working in the Finance department of an IT corporation. The Vice-President, Finance asks you to conduct action research. As an insider, what will be your focus,

Literature for information on position of cko : Investigate literature for information on position of CKO and find out an approximate percentage of firms with knowledge management initiatives which have CKOs.

Relevant cost of materials : What would be the relevant cost of the materials, in total, for purposes of determining a minimum acceptable price for the order for product GEE?

Determine expected return from investment : Your expectations from a one year investment in HiTech Computers is as follows and determine the expected return from this investment

Explain limited liability company and partnership : Explain Limited liability company and Partnership and word description of a business scenario either real or fictional

Criteria a company chooses for use edi and an extranet : When a company opens a private market space, it may use EDI, an extranet, EDI/Internet, various web services, XML or just the Internet with regular encryption.

Standardized and non-standardized assessment : Please provide an example of one standardized and one non-standardized assessment instrument (be specific with your examples, including what makes each assessment standardized or non-standardized).

User Account

All Pages