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Why the labour cost per hour and variable overhead per hour will regard as relevant cost?
As if they have two project and these two project will spent or incurred the cost anyway no matter which project is choose ,should it not therefore ignored as an irrelevant cost because they will be incurred whatever happens and not direct consequence of a decision or incremental cost.
I hope Tutor will explain this to me and clear my doubt ,I appreciate it.Are you sure you are referring to Paper F9 (and not Paper F5 where what you are asking is more likely)?
It is unusual in Paper F9 to be asked to consider two projects.
If it is F9, then there isn’t a specific rule – it depends on the wording of the question, and without knowing which question you are referring to I cannot help you.
If the question that is worrying you is a past exam question or a question in the BPP Revision Kit, then say which question it is and then I will be able to explain to you.
(If it is really an F5 problem then ask in the F5 Ask the Tutor Forum (although I would assume that you will have watched my free lectures on relevant costing where this is all explained in detail. The lectures for both F5 and for F9 are complete free courses that cover everything needed to be able to pass the exams well.)
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