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A. Bolero Industries Ltd. has been approached by a customer who would like a special job to be done for her, and is willing to pay $60,000 for it. The job would require the following materials.
i) Material B is used regularly by Bolero, and would need to be replaced to meet other production demands.
ii) Materials C and D are in stock due to previous over-buying, and have restricted use. Bolero has no other use for material C, but the units of material D could be used in another job as a substitute for 300 units of material E, which currently costs $15 per unit (of which the company has no units in stock at the moment).
iii) Should Bolero take the job? Which costs are relevant? Explain the reason you included/excluded each cost. Calculate the economic profit associated with job. Interpret this number in terms of Bolero's opportunities.
Match the items below by entering the appropriate code letter A. Controller B. Deficit C. Payout Ratio D. Stock Dividend E. Declaration Date F. Preemptive right G. Par Value H. L
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what is irrelevant cost and give example
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