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Relevant costing

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

  • This topic has 1 reply, 2 voices, and was last updated 9 years ago by John Moffat.
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  • September 4, 2016 at 4:45 pm #337533
    saqlainrattansi
    Member
    • Topics: 93
    • Replies: 97
    • ☆☆

    If a company needs to take out a loan in order to buy materials for a job, is the interest on that loan counted as relevant?

    Eg. A company needs to buy 1 Million dollars worth of materials however in order to buy this they need to take out a loan at 10%.

    Will there be 100,000 charged as relevant costs?

    Thanks!

    September 4, 2016 at 5:37 pm #337729
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54820
    • ☆☆☆☆☆

    Without seeing the exact wording of the question, then the answer would normally be yes (assuming that they needed to take out the loan for a whole year) ! 🙂

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