Question

Q 18

To complete a contract for fitting out a new shop in time for its opening, a refurbishment company has employed three temporary painters for 10 days at £45 per day and moved two carpenters who are paid £70 per day from another job for three days. The penalty for late completion of the shop is £300 but the delay to the carpenters’ current job will only cost £150. What are the relevant costs?

a)

£1,770

b)

£1,500

c)

£1,650

d)

£1,800

Answer 1

CALCULATION OF THE RELEVANT COST FOR CONTRACT
	Amount	Remarks
Temporary Painters (10 Days X 3 X 45) =	£                       1,350	Furture Cash Outflow
Two carpenters are move from another site to this Job	£                              -	These carpenters are already our employee , Sono addittional cash outflow
Delay in Current Job	£                           150	Furture Cash Outflow
Total Relevant Cost	£                       1,500
Answer = Option B =	£                       1,500