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 $2,426 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 $6.25 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 $66 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? Multiple Choice O O $1,125 $1,059
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 $2,426 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 $6.25 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 $66 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? Multiple Choice O O $1,125 $1,059
Chapter1: Financial Statements And Business Decisions
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![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 $2,426 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 $6.25 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 $66 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?
Multiple Choice
C
$1,125
$1,059
$1,232
$1,251](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F88d95438-7803-4319-839d-625f1dc2e2ea%2F248a2327-edb6-433a-b03c-4edf6f03e84d%2Fm9kui6s_processed.png&w=3840&q=75)
Transcribed Image Text: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 $2,426 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 $6.25 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 $66 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?
Multiple Choice
C
$1,125
$1,059
$1,232
$1,251
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