Tobek Plumbing has entered an agreement to purchase 10,000 feet of 2-inch copper pipe during the next calendar year at a price of $1.83 per foot. Tobek will use all of the copper pipe in a hotel construction project to be completed over the next two years. It has already signed the contract for the hotel construction project. As of the end of the current reporting year, the price of the 2-inch copper pipe has dropped to $1.67 per foot. Unfortunately, Tobek’s purchase agreement cannot be canceled.
Prepare a brief analysis of the major issue or issues in cases.
For each issue identified in case, clearly indicate an acceptable proposed solution.