Refer to the data given in Exercise 19.24. Global Chemical Company’s special order also requires 1000 kilograms of genatope, a solid chemical regularly used in the company’s products. The current stock of genatope is 8000 kilograms at a carrying amount of $8.10 per kilogram. If the special order is accepted, the firm will be forced to restock genatope earlier than expected, at a predicted cost of $8.70 per kilogram. Without the special order, the purchasing manager predicts that the price will be $8.30 when mal restocking takes place. The order size for genatope is 5000 kilograms.
1. What is the relevant cost of genatope?
2. Discuss each item of numerical data detailed in this exercise in terms of its relevance to the decision.