I came across a question which says "It is company policy to add 20% to the production cost as an allowance against administration costs associated with the jobs accepted"
Is this a relevant cost? Do we include this to find the cost for the one-off order?
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Is allowance for administration cost a relevant cost.
11y ago#1It is not a relevant cost.
If you are asked simply for the total cost then it is irrelevant, because it does not involve the company paying any additional costs in total.
Thank you sir!
11y ago#3You are welcome :-)
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