- This topic has 2 replies, 2 voices, and was last updated 16 years ago by
.
-
Posts
-
hi all,
can anyone please tell me why did the examiner include the license renewal fee of 150,000pound in 1st dec2oo8 and not in dec 2007, as i think it is a non relevant cost as it has already been incurred in earlier years and therefore should not be included in the calculation.
please help
thankx in advance
- Topics: 0
- Replies: 109
- ☆☆
To be a relevant cost, it must be avoidable AND incremental among options.
Firstly, you must be clear on what are the decision that Wonderland has to make: The effective date of taking up the transportation service by NSC, 1 December 2007 or 1 December 2008? (Options are these 2 effective dates)
The £150,000 licence fee is avoidable if the effective date is on 1 December 2007, which is the licence renewal date according to Note (2).
Instead, the licence fee is unavoidable (appear so under the 2008 column) if the effective date is on 1 December 2008. The licence fee, therefore, is incremental between the 2 effective dates.
- You must be logged in to reply to this topic.