Relevant costing

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September 4, 2016 at 4:45 pm #337533
saqlainrattansi
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If a company needs to take out a loan in order to buy materials for a job, is the interest on that loan counted as relevant?

Eg. A company needs to buy 1 Million dollars worth of materials however in order to buy this they need to take out a loan at 10%.

Will there be 100,000 charged as relevant costs?

Thanks!
September 4, 2016 at 5:37 pm #337729
John Moffat
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Without seeing the exact wording of the question, then the answer would normally be yes (assuming that they needed to take out the loan for a whole year) ! 🙂
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