TAILIEUCHUNG - Fundamentals of Management Accounting for Decision Makers 6th edition_2

Tham khảo tài liệu 'fundamentals of management accounting for decision makers 6th edition_2', tài chính - ngân hàng, kế toán - kiểm toán phục vụ nhu cầu học tập, nghiên cứu và làm việc hiệu quả | 52 CHAPTER 2 RELEVANT COSTS FOR DECISION MAKING tonne. If the business were to dispose of the material it could sell any quantity but only for 36 a tonne it does not have the contacts or reputation to command a higher price. Processing this material may be undertaken to develop either Product A or Product X. No weight loss occurs with the processing that is one tonne of material will make one tonne of A or X. For Product A there is an additional cost of 60 a tonne after which it will sell for 105 a tonne. The marketing department estimates that 500 tonnes could be sold in this way. With Product X the business incurs additional costs of 80 a tonne for processing. A market price for X is not known and no minimum price has been agreed. The management is currently engaged in discussions over the minimum price that may be charged for Product X in the current circumstances. Management wants to know the relevant cost per tonne for Product X so as to provide a basis for negotiating a profitable selling price for the product. Required Identify the relevant cost per tonne for Product X given sales volumes of X of a up to 1 500 tonnes b over 1 500 tonnes up to 2 000 tonnes c over 2 000 tonnes. Explain your answer. A local education authority is faced with a predicted decline in the demand for school places in its area. It is believed that some schools will have to close in order to remove up to 800 places from current capacity levels. The schools that may face closure are referenced as A B C and D. Their details are as follows School A capacity 200 was built 15 years ago at a cost of million. It is situated in a socially disadvantaged community area. The authority has been offered 14 million for the site by a property developer. School B capacity 500 was built 20 years ago and cost 1 million. It was renovated only two years ago at a cost of 3 million to improve its facilities. An offer of 8 million has been made for the site by a business planning a shopping complex .

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