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Hi,
I have done 20 questions test on your website. There is a question about relevant costing, unfortunately I could not copy and paste it but I will describe it the best I can:
The company has been offered a contract, which requires 5000 hrs of labour. The labour is currently working on another contract generating contribution of £12. There is lot of idle time, labour is paid £8 per hour. What is the relevant labour cost for the contract?
I believe that cost should be zero as there is some spare capacity, which is an idle time. However the correct answer is £40,000.
Please could you explain why?
Sorry, it is an error and the answer should be zero. The test has now been corrected.
Thank you for pointing it out.(Incidentally, because the questions are selected at random from a large bank of questions, do try the test a few times – you are likely to get different questions each time 🙂 )
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