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sarasmith06 sarasmith06
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A year ago

Munafo 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 6,500 units of component VGI. Each unit of VGI requires 1 unit of material I57 and 5 units of material M97. Data concerning these two materials follow:

MaterialUnits in StockOriginal Cost Per UnitCurrent Market Price Per UnitDisposal Value Per Unit
I572,400$ 9.10$ 9.40$ 8.95
M9733,960$ 4.70$ 4.70$ 3.50

Material I57 is in use in many of the company's products and is routinely replenished. Material M97 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 VGI?



▸ $174,850

▸ $213,130

▸ $213,850

▸ $171,925
Textbook 
Introduction to Managerial Accounting: Brewer Edition: 9e

Introduction to Managerial Accounting: Brewer Edition: 9e


Edition: 9th
Authors:
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wardasidwardasid
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A year ago
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sarasmith06 Author
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This site is awesome
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Thanks for your help!!
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Smart ... Thanks!
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