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McNeilly Inc. is thinking of using stocks of the old raw material in special project. Special project would need all 220 kilograms of raw material which are in stock and which originally cost company $1804 in total. If company were to buy new supplies of this raw material on open market, it would cost $8.55 per kilogram. Though, company has no other use for this raw material and would sell it at discounted price of $7.75 per kilogram if it were not used int he special project. Sale of raw material would involve delivery to purchaser at total cost of $97 for all 220 kilograms. Determine the relevant cost of 220 kilograms of the raw material when making decision weather to proceed with special project.

i) $1,705,

ii) $1,881,

iii) $1,804, or

iv) $1,608.

 

Project Management, Management Studies

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