Accounting · Relevant Costing (Machine Cost)
A machine owned by a company has been idle but could be used on a one-year contract. The net book value of the machine is $1,000. If not used on this contract, it could be sold now for a net amount of $1,200. After use on the contract, the machine will have no saleable value, and disposing of it in one year will cost $800. What is the total relevant cost of the machine to the contract?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1$400
- 2$800
- 3$1,200
- 4$2,000✓
Correct answer
$2,000
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