EFG is a small business making raspberry jam to sell at local markets. It has recently been approached by a major supermarket to produce a special order for the supply of lemon curd.
Two of the ingredients required are sugar and preservatives, both of which are in inventory.
The sugar has a historic cost of $4 per kg and a replacement cost of $5. It is in regular use for the production of the raspberry jam.
The factory has switched to organic processes and the preservatives are no longer required.
The historic cost of the preservatives was $3 per kg and the replacement cost is $2.50 per kg.
The preservatives can be re-sold to a local competitor for $1 per kg if they are not used in this order.
Which TWO of the following should be included in determining the relevant cost of the special order?
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