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Hello sir,
Please may i know about …
1.If a business not fund for job..bank overdraft $20000 @ 18% require for project 3months.overdraft ll b paid at the end of the project.
my answer Interest paid (20000×18%×3/12)=900 is relevant?
2.Whether Material have opportunity cost?
3.A contract require 600hrs.350hrs spare lobour capacity for normal rate pay.Remaining hrs for contract can b found either by weekend overtime paid at Double normal pay or by diverting labour from other production.The other production make contribution net of labour cost $5per hr.Normal rate $9per hr.
What is total relevant cost of labour?
A.$1250
B.$3500
C.$4500
D.$4900
My question no.3 hvn’t answer for me.so little explain for me sir
Hoping…1 and 2 are both explained in my free lectures on relevant costing (for (1) I use exactly the same answer as you have typed!!!)
For 3, There are 350 hours of spare capacity, so the relevant cost of these is 350 x $9.
As far as the other 250 hours are concerned, they either take from other work, in which case the relevant cost per hour is 5 + 9 = $14; or alternatively they work overtime in which case the relevant cost per hour is $18. They will choose the cheapest, and so they will take from other work and the relevant cost of these hours is 250 x $14.Yeah sir.And Thanks
Q-1 found at CH-9 /eg-2
Q-2 material never opp cost
Q-3 relevant cost is B.$3500
Is correct for me?
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