Q5: (Chapter 2 - Relevant Costing) Inventory Historic cost (/unit) Sales value (/unit) Replacement cost (/unit) Component A 14 18 22 13 8 10 Component B Component C 45 11 16 Component D 30 20 Component A is constant use in business. We currently have 850 units of Component A Component B was bought several years ago and there are 120 units in stock which has no current use in business. Component C was bought specifically for Project "Delta" which was abandoned and there is no other use. We have 500 units. Its scrap value is 11 per unit. Alternatively, it can be used as a substitute for other Component R which is currently used by the business. It will require further processing cost of 7 per unit. Component R's purchase price is 20 per unit. Component Dis 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 650 (i.e to be paid for being collected). For a New Project 1, we need 450 units of Component A, 600 units of Component B. 700 of Component C and 400 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. (8 marks)