Relevant cost analysis (exercise from the revision kit)

Hello Sir, I hope you are doing well. I watched your lectures and I did the questions, now I am doing the exercises from the kit book and I got one exercise that I do not understand. If you could kindly help me please? H has in inventory 15,000 kg of material M, a raw material which it bought for 3$/kg five years ago, for a product line which was discontinued four years ago. M has no use in its existing state but could be sold as scrap for $1 per kg. One of the company`s current product (NH) requires 4 Kg of a raw material, available for$ 5 per kg. M can be modified at a cost of £0.75 per kg so that it may be used as a substitute for this material. However, after modification, 5 kg of M is required for every unit NH to be produced. H has now received an invitation to tender for a product which could use M in its present state. What is the relevant cost per kg of M to be included in the cost estimate for the tender? A- $0.75 B- $1.00 C- $ 3.00 D- $ 3.25 SOLUTION: D (Why we have to do all this process? why can't be the scarce price, if it's the higher?) Replacement material cost saved (4kg @ $5.00) $20.00 less further processing cost ($0.75 x 5 kg) $ 3.75 Value of M in current use, for each unit made = $16.25 Therefore opportunity cost of using M n the job being tendered for is $16.25 / 5 kg = $3.25 per kg. Thank you Nerea