Magic Dusters is considering a special order from Stay Clean Ltd for a special cleaning product for windows. One ingredient required for the product is Alpha A which Magic Dusters has in its inventory. Magic Dusters current products do not use Alpha A; however, it was an ingredient in one of Magic’s discontinued product lines. Alpha A was purchased at a cost of $10 per litre, and could be currently sold for $5 per litre, with a replacement cost of $12 per litre.

Required
You have been requested to prepare a financial analysis of the special order from Stay Clean Ltd. Given that 1000 litres of Alpha A are required in production of this order what is the relevant cost of Alpha A to be included in the analysis?