Question A8 Vermonto Ltd is putting together a tender for a one-off contract using relevant costing principles. The job requires 50m of Material X Vermonto has established the following information regarding material X: Amount held Original cost Net realisable value Current purchase price Material X 40m2 £25 per m £28 per m £30 per m? Material X is no longer used by Vermonto for its ongoing operations and any existing inventories will be sold if not used. What is the relevant cost for material X for the purpose of pricing the contract?
Question A8 Vermonto Ltd is putting together a tender for a one-off contract using relevant costing principles. The job requires 50m of Material X Vermonto has established the following information regarding material X: Amount held Original cost Net realisable value Current purchase price Material X 40m2 £25 per m £28 per m £30 per m? Material X is no longer used by Vermonto for its ongoing operations and any existing inventories will be sold if not used. What is the relevant cost for material X for the purpose of pricing the contract?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Vermonto Ltd is putting together a tender for a one-off contract using relevant costing principles.
The job requires 50m2 of Material X
Vermonto has established the following information regarding material X:
Material X
Amount held 40m2
Original cost £25 per m2
Net realisable value £28 per m2
Current purchase price £30 per m2
Material X is no longer used by Vermonto for its ongoing operations and any existing inventories will be sold if not used.
What is the relevant cost for material X for the purpose of pricing the contract?
Transcribed Image Text:Question A8
Vermonto Ltd is putting together a tender for a one-off contract using relevant
costing principles.
The job requires 50m? of Material X
Vermonto has established the following information regarding material X:
wwww w
Amount held
Original cost
Net realisable value
Current purchase price
Material X
40m2
£25 per m
£28 per m?
£30 per m
Material X is no longer used by Vermonto for its ongoing operations and any
existing inventories will be sold if not used.
What is the relevant cost for material X for the purpose of pricing the contract?
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