Q10: (Chapter 2 - Relevant Costing) Part A: Inventory Replacement cost (/unit) Historic cost (/unit) Sales value (/unit) Component A 20 27 32 Component B 35 14 18 Component C 19 9 15 Component D 42 25 Component A is constant use in business. We currently have 1,500 units of Component A. Component B was bought several years ago and there are 350 units in stock which has no current use in business. Component C was bought specifically for Project "Evolve" which was abandoned and there is no other use. We have 400 units. Its scrap value is 9 per unit. Alternatively, it can be used as a substitute for other Component Z which is currently used by the business. It will require further processing cost of 4 per unit. Component Z's purchase price is 15 per unit. Component D is very toxic and, if it is not used for this particular job, the whole of the inventories will have to be disposed of safely at a cost of 500 (i.e to be paid for being collected). Currently, business has 300 units of this component. For a New Project 1, we need 1,700 units of Component A, 600 units of Component B, 850 of Component C and 800 units of Component D. Calculate the total relevant cost to be included for Components A-D for this New Project 1 and briefly explain the rationale for your choice. (4 marks)