Note: While we did not look at relevant cost of overheads in the lecture, I did mention that we could also calculate the relevant cost of overheads. Below is a question to help you understand the basics. The key however is that consistent with our general definition of relevant cost, only those overheads that vary as a direct result of a decision taken are relevant overheads. JB absorbs overheads on a machine hour rate, currently $20/hour of which $7 is for variable overheads and $13 for fixed overheads. The company is deciding whether to undertake a contract in the coming year. If the contract is undertaken, it is estimated that fixed costs will increase for the duration of the contract by $3,200. The contract would require 800 hours of machine time. What is the relevant cost of overheads for the contract