Purchase Solution

McNeilly Inc. is considering using stocks of an old raw material in a special project

Not what you're looking for?

Ask Custom Question

McNeilly Inc. is considering using stocks of an old raw material in a special project. The special project would require all 220 kilograms of the raw material that are in stock and that originally cost the company $1804 in total. If the company were to buy new supplies of this raw material on the open market, it would cost $8.55 per kilogram. However, the company has no other use for this raw material and would sell it at the discounted price of $7.75 per kilogram if it were not used int he special project. The sale of the raw material would involve delivery to the purchaser at a total cost of $97 for all 220 kilograms. What is the relevant cost of the 220 kilograms of the raw material when deciding weather to proceed with the special project.

$1,705, $1,881, $1,804, or $1,608.

Purchase this Solution
Solution Summary

The stocks of an old raw material in a special project is determined.

Solution Preview

McNeilly Inc. is considering using stocks of an old raw material in a special project. The special project would require all 220 kilograms of the raw material that are in stock and that originally cost the company $1804 in total. If ...

Solution provided by:
Manal Elkhoshkhany, MBA
Education
  • BA, Ain Shams University, Cairo Egypt
  • MBA, California State University, Sacramento
Recent Feedback
  • "ty i have more need help with"
  • "ty i have jmore i need help with"
  • "great help"
  • "excellent help"
  • "Very helpful and easy to understand."
Purchase this Solution
Free BrainMass Quizzes
Understanding the Accounting Equation

These 10 questions help a new student of accounting to understand the basic premise of accounting and how it is applied to the business world.

Writing Business Plans

This quiz will test your understanding of how to write good business plans, the usual components of a good plan, purposes, terms, and writing style tips.

Academic Reading and Writing: Critical Thinking

Importance of Critical Thinking

Balance Sheet

The Fundamental Classified Balance Sheet. What to know to make it easy.

Basics of corporate finance

These questions will test you on your knowledge of finance.

View More Free Quizzes
Related BrainMass Solutions

  • Average Carrying Value/ Investment; Salvage Value; Payback Period, etc.

    The $90,000 is not multiplied by any of the above; the $300,000 is multiplied by the future value of $1. 3. Young Company is considering the possibility of investing $600,000 in a special project.

  • Milligan Corporation: Relevant Cost

    The company already has 640 liters of this raw material in stock that original cost $8.30 per liter. Material TF54 is used in the company's main product and is replenished on a periodic basis.

  • NPV and lease payment calculations for new project

    327180 NPV and lease payment calculations for new project Click Inc. is considering investing in a new project to produce and sell clips.

  • Percentages for raw-material costs

    We then sum the total raw material costs for all the three products and that is $1,137,500 Proportion of raw material cost for Product G is 280,000/1,137,500 = 25% For Product T = 787,500/1,137,500 = 69% Product W = 70,000/1,137,500 = 6% I am using

  • Product Omega and the Western Company

    Each unit of Product Omega requires 3 kgs of raw material. Next month's production budget for product Omega is as follows: Opening stocks: Raw materials 15,000 kgs.

  • Gandon plc: special order relevant costs

    The following information is available: RAW MATERIAL Each unit of product X would require three different types of raw materials, designated A, B and C.

  • linear programming model

    72631 Problem 21 RMC, Inc. is a small firm that produces a variety of chemical products. In a particular production process, three raw materials are blended to produce two products, a fuel additive and a solvent base.

  • Traditional costing vs activity based costing

    She got top management's approval to design an activity-based costing system, and an ABC project team was formed. In stage one of the ABC project, each of the overhead items listed in the overhead budget was placed into its own activity cost pool.

  • Linear Programming : Profit Contribution and Maximizing Profit

    The special treatment of the liquid waste will cost $0.25 per pound. For the upcoming production period, 5000 pounds of raw material A and 7000 pounds of raw material B will be available.

View More Related Solutions