Problem and Solution to 14-34

Problem and Solution to 14-34 - hand from the days when it...

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Problem 14-34 (Special Order) I nternational Chemical company located in Buenos, Argentina, recently received a n order for a product it does not normally produce. Since the company has excess production capacity, management is considering accepting the order. In analyzing the decision. The assistant controller is compiling the relevant costs of producing the order. Production of the special order would require 8,000 kilograms of theolite. Intercontinental does not use theolite for its regular products. But the firm has 8,000 kilograms of chemical on
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Unformatted text preview: hand from the days when it used theolite regularly. The theolite could be sold to a chemical wholeseller for 14,500 P . The book Value of the theolite is 2-00 P per kilogram. Intercontinental cluld by theolite for 2-40 P per kilogram. (P denotes Peso u nit of currency). 1. What is the relevant cost of theolite for the purpose of analyzing the special order decision? 2. Discuss the each of the numbers given in the exercise with regard to its relevance in making the decision. Solution to 13- 34...
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