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relevant costing

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA PM Exams › relevant costing

  • This topic has 3 replies, 2 voices, and was last updated 3 years ago by John Moffat.
Viewing 4 posts - 1 through 4 (of 4 total)
  • Author
    Posts
  • August 30, 2021 at 12:51 am #633446
    deekshabee
    Participant
    • Topics: 25
    • Replies: 22
    • ☆

    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.

    August 30, 2021 at 8:03 am #633468
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54699
    • ☆☆☆☆☆

    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?

    August 31, 2021 at 12:01 am #633575
    deekshabee
    Participant
    • Topics: 25
    • Replies: 22
    • ☆

    Ohh okay,
    This was a silly question to ask. I am sorry.

    And yes, I am watching your lectures. They are great.

    Thank you

    August 31, 2021 at 8:30 am #633607
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54699
    • ☆☆☆☆☆

    No problem (and thank you for the comment 🙂 )

  • Author
    Posts
Viewing 4 posts - 1 through 4 (of 4 total)
  • The topic ‘relevant costing’ is closed to new replies.

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