Wonder Textile has 10-year-old sewing machine with a cost price of $5,000. The rate of depreciation on the sewing machine is 10% per annum. The scrap value is $750. It has not been used in the operation for some months. The resale value of that machine is $1,200. It can be used for 8 months, for the contract which Wonder has received. At the end of eight months after the contract, it would have no saleable value. The cost of disposal and dismantling of the sewing machine would be $600.

Required:

What will be the relevant cost of the sewing machine to the contract?

Answer rating: 100% (QA)

The relevant cost of the sewing machine to the contract will be the net resale value of ... View the full answer