?A company is calculating the relevant cost of the material to be used on a particular?contract. The contract requires 4,200 kgs of material H and this can be bought for $6.30 per?kg. The company bought 10,000 kgs of material H some time ago when it paid $4.50 per kg.?Currently 3,700 kgs of this remains in inventory.? The inventory of material H could be sold?for $3.20 per kg.??
The company has no other use for material H other than on this contract, but it could?modify it at a cost of $3.70 per kg and use it as a substitute for material J.? Material J is?regularly used by the company and can be bought for $7.50 per kg.?
What is the relevant cost of the material for the contract??