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Stocks of old raw material in special project

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Reference no: EM133296011

Otool Incorporated is considering using stocks of an old raw material in a special project. The special project would require all 180 kilograms of the raw material that are in stock and that originally cost the company $2,466 in total. If the company were to buy new supplies of this raw material on the open market, it would cost $7 per kilogram. However, the company has no other use for this raw material and would sell it at the discounted price of $6.05 per kilogram if it were not used in the special project. The sale of the raw material would involve delivery to the purchaser at a total cost of $62 for all 180 kilograms. What is the relevant cost of the 180 kilograms of the raw material when deciding whether to proceed with the special project?

Reference no: EM133296011

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