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A company has 600 litres of a chemical in stock that it no longer uses and was contemplating selling it on at 5.00 per litre.

A company has 600 litres of a chemical in stock that it no longer uses and was contemplating selling it on at 5.00 per litre. The material was originally purchased at 10 per litre and has a replacement cost of 13.50. A client has approached the company with a one off contract that will consume 150 litres of material. Using a relevant or incremental costing approach, what material cost should be used?

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