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Hello Mr. John,
Can you please explain to me what does the following line means?
“Any historic cost given for materials is always a sunk cost and never relevant
Unless it happens to be the same as the current purchase price.”I am struggling to understand the 2nd part of the sentence.
If material needs to be purchased in order to do the work, then the relevant cost is the current purchase price. If the current purchase price happens to be the same as the original cost of the material in inventory then fine, otherwise the original cost is of no relevance.
Have you watched my free lectures on relevant costing?
Ohh okay,
This was a silly question to ask. I am sorry.And yes, I am watching your lectures. They are great.
Thank you
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