Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA PM Exams › december 2011 question 1
- This topic has 3 replies, 2 voices, and was last updated 10 years ago by John Moffat.
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- November 19, 2013 at 11:03 am #146735
Hi,
i have question related to point 4. Why this cost paid to third party is not included as relevant cost?Examiner answer is: This is a cost paid directly by Push Co to a third party. Since it is not a relevant cost for T Co, it has been excluded
i dont get it since it is clear that this cost would be incurred only if contract is undertaken..
please help
thank youNovember 19, 2013 at 4:45 pm #146799The cost will only be incurred if the contract is undertaken, but we are trying to calculate the costs that will be incurred by T Co.. When T quotes a price for the job it has to cover all the costs that T will incur.
Since the cost in point 4 is not incurred by T Co. it is not included in the list of T’s costs.
(Obviously it means that Push ends up paying more – but we are not asked how much Push will end up paying to everyone)
November 19, 2013 at 5:16 pm #146819thank you
November 20, 2013 at 5:21 pm #147023You are welcome 🙂
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