Without the special order the purchasing managerpredicts

Reference no: EM13481821

Global's special order also requires 500 kilograms of genatope, asolid chemical regularly used in the company's products. Thecurrent stock of genatope is 8,500 kilograms at a book value of8.90 p per kilogram. If the special order isaccepted, the firm will be forced to restock genatope earlier thanexpected, at a predicted cost of 9.40 p perkilogram. Without the special order, the purchasing managerpredicts that the price will be 6.30 p, when normal restocking takes place. Any order of genatope must be in the amountof 5,000 kilograms.

(a) What is the relevant cost of genatope?

Reference no: EM13481821

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