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March/June 2019 Belton Park Resort

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA PM Exams › March/June 2019 Belton Park Resort

  • This topic has 1 reply, 2 voices, and was last updated 4 years ago by John Moffat.
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  • December 8, 2020 at 2:41 am #598249
    apark
    Member
    • Topics: 1
    • Replies: 0
    • ☆

    Why do we exclude costs in the “incremental running costs” section for staff costs and power costs.

    Staff costs: We exclude the manager’s salary $2,500 and chef’s salary $2,000 in hotel and manager’s salary $0 in water park – is it because they are paid ‘fixed’ for the full year regardless of their working hours?

    Power costs: We exclude the electric $0, gas – fixed charge $0 and security $0. Is this because these are fixed monthly charges so we exclude all fixed charges in the incremental cash flows?

    December 8, 2020 at 9:07 am #598330
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54699
    • ☆☆☆☆☆

    Correct. Incremental means extra and so if the payments are fixed then there is no extra cost or saving.

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