Drayton Limited is a small specialist manufacturer of components used in the manufacture of yachts. Drayton...
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Drayton Limited is a small specialist manufacturer of components used in the manufacture of yachts. Drayton Limited has been asked to supply 500 identical components to one of its major customers over the next year, and is deciding whether to accept the order. Each component uses 8kg of steel. Drayton Limited currently has inventories of 10,000kg of steel, which were bought at a cost of £12 per kg. The current seling price of steel is £14 per kg. Future purchases of steel are likely to be at £17 per kg. The company uses steel continuously in its production departments At what price should the steel be included in calculations of the relevant oosts of accepting the order? The relevant cost to be included in the price calculations is Relevant price Replacement cost of steel Drayton Limited is a small specialist manufacturer of components used in the manufacture of yachts. Drayton Limited has been asked to supply 500 identical components to one of its major customers over the next year, and is deciding whether to accept the order. Each component uses 8kg of steel. Drayton Limited currently has inventories of 10,000kg of steel, which were bought at a cost of £12 per kg. The current seling price of steel is £14 per kg. Future purchases of steel are likely to be at £17 per kg. The company uses steel continuously in its production departments At what price should the steel be included in calculations of the relevant oosts of accepting the order? The relevant cost to be included in the price calculations is Relevant price Replacement cost of steel
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Related Book For
Business research methods
ISBN: 978-1439080672
8th Edition
Authors: William G Zikmund , Barry J. Babin, Jon C. Carr, Mitch Griff
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