1. Bright Limited is considering whether or not to accept a special contract to supply 2,000 identical units of component X to a customer. To manufacture one unit of component X, Bright requires 4kg of material A. Bright currently has 3,000kg of material A in stock which had an original cost of £4.20 per kg. The current replacement cost of material A is £4.75 per kg and its scrap value is £2 per kg; material A is in constant use by the business. 
2. 
   
3. What is the total relevant cost of using material A for this special contract?

Answer rating: 100% (QA)

Incremental Cost per Unit Replacement Cost Original Cost 475 420 055 Total I... View the full answer