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    Relevant costs

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    A bat costing 108K is wrecked. It can either be disposed of for 11K and replaced with a similar boat for 110K, or rebuilt for 98K. What is the net relevant cost of replacing the boat?

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    © BrainMass Inc. brainmass.com October 9, 2019, 11:36 pm ad1c9bdddf
    https://brainmass.com/business/relevant-costing-and-short-run-decision-making/relevant-costs-replacing-boat-261858

    Solution Preview

    The $108K cost is a sunk cost and is not relevant.
    There are ...

    Solution Summary

    The solution explains the use of relevant cost is coming to the correct decision.

    $2.19