urchased raw materials of GH¢50000 during the 2020 production year. During the 2021 production period, it has purchased new materials of GH¢100000 for its changed product rendering the old material non-usable for production. Which of the following statement is correct? A. The total m
urchased raw materials of GH¢50000 during the 2020 production year. During the 2021 production period, it has purchased new materials of GH¢100000 for its changed product rendering the old material non-usable for production. Which of the following statement is correct? A. The total m
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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A company purchased raw materials of GH¢50000 during the 2020 production year. During the 2021 production period, it has purchased new materials of GH¢100000 for its changed product rendering the old material non-usable for production. Which of the following statement is correct?
A. The total material cost of production is GH¢150000
B. The old material cost is sunk but still relevant
C. The old material cost is sunk cost and direct cost to the product
D. The old material cost is sunk and a period cost
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