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Short-term Decision making – Relevant Costing – ACCA Performance Management (PM)

VIVA

Reader Interactions

Comments

  1. OISEE says

    December 26, 2024 at 5:43 am

    Hi sir, may I ask a simple question? If the question stated that:

    Material A (9,000 kg RM26 per kilo) at RM 234,000

    The note for this cost is the Material is in continual use and there are 3,000 kg of material in stock, which was purchased at RM26.00 per kg. The current cost of the material is RM32 per kg.

    How should I recognise the relevant cost? Is it 6000kg x RM32 per kg?

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    • OISEE says

      December 26, 2024 at 5:47 am

      Because it says in continual use, I’m not sure shall I recognise the relevant cost as 9000kg x RM32 or just 6000kg x RM32 because there are 3000kg of material in stock.

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      • John Moffat says

        December 26, 2024 at 3:35 pm

        Because it is in regular use the items used from inventory will need replacing, so the relevant cost is all 9000kg at RM32.

      • OISEE says

        December 27, 2024 at 2:20 am

        Thank you, Sir, for your response.
        What about this one :
        Unskilled labour (8,000 hours RM7 per hour) at RM 56,000
        The note for this cost is Unskilled labour is only employed when such workers are required.

      • John Moffat says

        December 27, 2024 at 7:40 am

        If they are only employed as required then the relevant cost is the cost of paying them.

      • OISEE says

        December 28, 2024 at 8:33 am

        Alright, Sir. I got the idea already. Thank you so much.

      • John Moffat says

        December 28, 2024 at 9:43 am

        You are welcome 馃檪

  2. John Moffat says

    November 27, 2024 at 8:50 am

    You are welcome 馃檪

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  3. rimshaaaaa says

    November 26, 2024 at 10:06 pm

    thank you so much for this explanation sir, this was really helpful

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