- 8 Marks
PM – May 2018 – L2 – Q3b – Cost-Volume-Profit (CVP) Analysis
Calculate the relevant cost for a special contract and determine if it should be accepted.
Question
Deban Construction Limited is deciding whether or not to proceed with a one-off special contract for which it would receive a one-off payment of N2,000,000. Details of relevant costs are provided for labor, materials, storage, and overheads. Calculate the relevant cost of the contract and advise whether the contract should be accepted or not on financial grounds.
Find Related Questions by Tags, levels, etc.
- Tags: Incremental Analysis, Labour Costs, Material Costs, Overheads, Relevant Costs, Special Contract
- Level: Level 2
- Topic: Decision making techniques
- Series: MAY 2018
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