Brown Ltd received a special offer to produce Product Brown from a supplier that is willing to pay N$700, a price which is 20% less than the normal market value. The order requires the following material: Kente P.

Brown Ltd requires 2 meters of Kente P. The company currently has 3 meters in stock, which were purchased at a price of N$290 per meter. The company uses this material on a regular basis. Brown Ltd now purchases this material from a Zambian supplier, at a purchase price of N$300 per meter. The supplier offers a 20% discount for orders in quantities beyond 10 meters, and Brown Ltd always places their orders over this quantity. The company incurs carriage cost of N$10 per meter with every order. Kente P could also be used as a substitute for a similar material, Kente C, which has a value of N$305.

**Required:**

Calculate the relevant cost of the meters of Kente P required for this order.

## 1 Answer