An organisation is considering the costs to be incurred in respect of a special order opportunity. The order would require 1,250 kgs of material D. This is a material that is readily available and regularly used by the organisation on its normal products. There are 265 kgs of material D in stock which cost ?795 last week. The current market price is ?3.24 per kg. Material D is normally used to make product X. Each unit of X requires 3 kgs of material D, and if material D is casted at ?3 per kg, each unit of X yields a contribution of ?15.The relevant cost of material D to be included in the costing of the special order is nearest to:

Syllabus (with weightage)
A. Cost Management 20%
B. Strategic Cost Management Tools and Techniques 50%
C. Strategic Cost Management - Application of Statistical Techniques in Business Decisions 30%

Related Test: CMA Intermediate Exam: Cost and Management Accounting