A job needs 200 kg of a material held in inventory, bought at $11 per kg, currently $15 per kg and in regular use. What is the relevant cost?

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Question

A job needs 200 kg of a material held in inventory, bought at $11 per kg, currently $15 per kg and in regular use. What is the relevant cost?

Accepted Answer

$3,000 — Award 1 mark. Working: 200 × $15 = $3,000. Because the material is in regular use, taking it for this job forces a replacement purchase at the current price, so the $11 originally paid is irrelevant.

Answer

Nil, because the material is already owned

Answer

$2,200

Answer

$3,000

Answer

$800

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