CDF is the manufacturing company within the DF group, CDG has been asked to provide a quotation for a contract for a new customer and is aware that this could lead to further orders. Consequently, CDF will produce the quotation by using relevant costing instead of its usual method of full costing plus pricing. The following information has been obtained in relation to the contract: Material D 40 tons of material D would be required. This material is a regular use by CDF and has a current purchase price of R38 per ton. Currently, there are 5 tons on inventory which cost R35 per ton. The resale value of the material in inventory is R24 per ton. Components 4000 would be required. These could be bought externally at R15 each or alternatively they could be supplied by RDF, another company within the CDF manufacturing group. The variable cost of the component if it were manufactured by RDF would be R8 per unit, and RDF adds 30% to its variable to contribute to its fixed costs and a further 20% to these total costs to set its internal price. RDF has sufficient capacity to produce 2500 components without affecting its ability to satisfy its own external customers. However, to make the