A company is calculating the relevant costs of the material to be used on a particular contract. The contract requires 4,700 kgs of material A and this can be bought for RM5.20 per kg. The company bought 15,000 kg of material A sometime ago when it paid RM4.30 per kg. Currently 3,900 kgs of this remains in inventory. The inventory of material A could be sold for RM3.50 per kg.

The company has no other use for material A other than on this contract, but it could modify it at a cost of RM4.20 per kg and use it as a substitute for material B. Material B is regularly used by the company and can be bought for RM7.60 per kg.

Required:

a) The opportunity cost for Material A is RM___ /kg.

b) The total relevant cost of the material for the contract is RM____