Your company regularly uses material X and currently has in stock 600 kg, for which it paid £1500 two weeks ago. It this were to be sold as raw material it could be sold today for £2.00 per kg. You are aware that the material can be bought on the open market for £3.25 per kg, but it must be purchased in quantities of 1000 kg.
You have been asked to determine the relevant cost or 600 kg of material X to be used in a job for a customer. The relevant cost of the 600 kg is:
(a) £1200
(b) £1325
(c) £1825
(d) £1950
(e) £3250
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