Calculate how much material A

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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A. £10
B. £14
C. £16
D. £20
Transcribed Image Text:A. £10 B. £14 C. £16 D. £20
Brown Ltd has 1,000 kg of material A in stock, which cost it £20 per kg. It
has been offered £16 per kg by a dealer, but delivery to the dealer will cost
£6 per kg. It could use material A in another process instead of a material
costing £14 per kg, but this will require more labour costing £8 per kg,
although staff are currently under-utilised. Calculate how much material A
is worth to Brown Ltd per kg:
Transcribed Image Text:Brown Ltd has 1,000 kg of material A in stock, which cost it £20 per kg. It has been offered £16 per kg by a dealer, but delivery to the dealer will cost £6 per kg. It could use material A in another process instead of a material costing £14 per kg, but this will require more labour costing £8 per kg, although staff are currently under-utilised. Calculate how much material A is worth to Brown Ltd per kg:
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