A special project is going to be started by Hally Corporation.Company is considering using stocks of an old raw material in aspecial project. The special project would require all 230kilograms of the raw material that are in stock and that originallycost the company $900 in total. If the company were to buy newsupplies of this raw material on the open market, it would cost$8.25 per kilogram. However, the company has no other use forthis raw material and would sell it at the discounted price of $7.50per kilogram if it were not used in the special project. The sale ofthe raw material would involve delivery to the purchaser at a totalcost of $50 for all 230 kilograms. What is the relevant cost of the230 kilograms of the raw material when deciding whether toproceed with the special project?
A special project is going to be started by Hally Corporation.Company is considering using stocks of an old raw material in aspecial project. The special project would require all 230kilograms of the raw material that are in stock and that originallycost the company $900 in total. If the company were to buy newsupplies of this raw material on the open market, it would cost$8.25 per kilogram. However, the company has no other use forthis raw material and would sell it at the discounted price of $7.50per kilogram if it were not used in the special project. The sale ofthe raw material would involve delivery to the purchaser at a totalcost of $50 for all 230 kilograms. What is the relevant cost of the230 kilograms of the raw material when deciding whether toproceed with the special project?
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