[Answer] The relevant cost is the current market value: 720 liters × current market $5.45 per liter = $3 92411. Narciso Corporation is preparing a bid for a special order that would require 880 liters of material R19S. The company already has 280 liters of this raw material in stock that originally cost $6.10 per liter. Material R19S is used in the company's main product and is replenished on a periodic basis. The resale value of the existing stock of the material is $5.45 per liter. New stocks of the material can be readily purchased for $6.20 per liter. What is the relevant cost of the 880 liters of the raw material when deciding how much to bid on the special order? A. $5 006B. $5 456C. $4 796D. $5 056

Answer: B

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The relevant cost is the current market value: 720 liters × current market $5.45 per liter = $3 92411. Narciso Corporation is preparing a bid for a special order that would require 880 liters of material R19S. The company already has 280 liters of this raw material in stock that originally cost $6.10 per liter. Material R19S is used in the company's mai...

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