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S Bhd. is pricing a new contract. The new contract requires the use of 50 tonnes of metal X. There are 25 tonnes of X in inventory at the moment, which were bought for RM200 per tonne. S Bhd. no longer has any use for metal X. The current purchase price is RM210 per tonne, and the metal could be disposed of for net scrap proceeds of RM150 per tonne.
What cost should be charged to the new contract for metal X?
This is not examinable in Paper FA. (It is not examinable until Paper PM and is explained in my free lectures for Paper PM)
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