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Relevant costing

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA PM Exams › Relevant costing

  • This topic has 0 replies, 1 voice, and was last updated 10 years ago by Lilit.
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  • April 6, 2015 at 4:13 pm #240310
    Lilit
    Participant
    • Topics: 34
    • Replies: 62
    • ☆☆

    Hi,
    The question says that
    The labor is fully employed by….on jobs, where they produce contribution of 2$ per lab/h.
    Their current rate is 10$ and extra could be hired on 20$ if necessary.
    I understand that this 2 dollars are lost opportunities and thus cost to the business. But why 10$ is a relevant cost. In any case we are going to pay them the sum.Could you please help me to understand where my mistake is.

    Thanks a lot.

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