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Hi,
i have question related to point 4. Why this cost paid to third party is not included as relevant cost?Examiner answer is: This is a cost paid directly by Push Co to a third party. Since it is not a relevant cost for T Co, it has been excluded
i dont get it since it is clear that this cost would be incurred only if contract is undertaken..
please help
thank youThe cost will only be incurred if the contract is undertaken, but we are trying to calculate the costs that will be incurred by T Co.. When T quotes a price for the job it has to cover all the costs that T will incur.
Since the cost in point 4 is not incurred by T Co. it is not included in the list of T’s costs.
(Obviously it means that Push ends up paying more – but we are not asked how much Push will end up paying to everyone)
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