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Sir could you please explain why is heat and Powe cost directly attributed to production is not included in the calculation of part b of the question.heating is a manufacturing cost.
The examiner did make a note at the start of the answer to part (b) (which the BPP answer has printed) stating that the fixed costs remain unaltered because as soon as one unit of with is made, the costs rise.
However the examiners answer also has another note (which the BPP answer has not printed for some reason) that says ” It is equally as acceptable to have treated the heat and power costs and variable and included them. It will not have changed the outcome and is an entirely acceptable interpretation of the scenario”.
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