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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA PM Exams › Relevant cost question.
The questions says:
Overhead 35 hours @ 10$ per hour. In note it says, “the overhead absorption rate includes power costs that are directly related to machine usage. If this job undertaken, it is estim.that machine time required would be 10 hours. The machine incur power costs of 0.75$ per hour. There are no other overhead costs that can be specific.identif.with this job.”
So i think the relevant cost is nil, because there are 35 hours already. Am i right?
Second point.same question.
Administration overhead @ 20% of prod.cost
Note.” It is company policy to add 20% to the prod.costs as an allowance for admin.costs associated with jobs accepted. ”
Is this relevan?
I really need to see the whole question to be able to give you a definite answer.
Doesn’t the book in which you found it have an answer? If it doesn’t then you should be using a different book 🙂