please solve question (a,b,c and d )

Task 2(1900 wordsvall The principle of relevant costing is primarily applicable where decisions have to be made. The inclusion of irrelevant information during the process, could lead to the incorrect decision being made. A relevant cost/income is anycost/income that will NOT be incurred if one decision is made instead of another. In the light of the discussion analyse and answer the question below. Aliisa Manager of the ABC who was asked to quote for a contract and prepare the following cost estimate for the job OMR Material - 500 units of a 50,000 Materials - 200 units of Other direct materials Labour costs 20,000 Subcontracted work 30.000 Supervisors' wages 7.000 Estimating & design Total cost The following additional information are wailable: Material 5.000 Pe Version Estimates are based on original cost. The company has so units of Ain stock - it has no other use other than reale OMR 30 per unit or as a substitute for another type of material which costs OMR 40 per unit. Material is in short supply and fresh supplies are not expected in the near ture, it is used on a regular product line which has the following details OMR Material B-2 units Other variable costs Total cost 190 6) Labour These consist of the wages of time, permanent staff in two categories sklled staff, 1.000 hours OMRIO per hour and united staff, 500 hours OMR 5 per hout. Stilled wall is currently werking tul capacity and any additional work will require overtime working at a ses premium United staff levels are in exces of current requirements, this contract is not obtained, some unskilled staff will be laid off at a cost of OMR500 Overheads The overheads comprise variable cerad incurred at a rate of OMS per labour hour and general Fond overheads of the business charged at a rate of 100% of variable head Supervisors' wages consist of OMR7,000 of existing supervisors salaries plus an overtime allowance of OMRSO which would have to be paid this contracts won Mieting & design costs were incurred to prepare the drawings and plans for this contract Alis facing a problem of estimating the cost based on the relevant casting principle on the context of relevant conting principle and in the light of the above data available for AC advice Al A Discuss the concept and importance of relevant cating (10 mars & Calculate the cost estimate based on the relevant costing principle (20 marts Clearly state any assumptions made (10 marks] D. Discuss importance of relevant costing principle for decision making 100 mark! Task 2 (1500 words equivalent) The principle of relevant costing is primarily applicable where decisions have to be made. The inclusion of irrelevant information during the process, could lead to the incorrect decision being made. A relevant cost/income is any cost/income that will NOT be incurred if one decision is made instead of another. In the light of the discussion, analyse and answer the question below. Ali is a Manager of the ABC who was asked to quote for a contract and prepare the following cost estimate for the job. OMR Materials - 500 units of A 50,000 41,000 Materials - 200 units of B Other direct materials 5,000 Labour costs 40,500 Overheads 20,000 Sub contracted work 10,000 7,000 10,000 Supervisors' wages Estimating & design Total cost The following additional information are available: 163,500 (1) Materials Pg.4 Version 1 350 100 Estimates are based on original cost. The company has 500 units of A in stock - it has no other use other than resale at OMR 30 per unit or as a substitute for another type of material which costs OMR 40 per unit. Material B is in short supply and fresh supplies are not expected in the near future; it is used on a regular product line which has the following details: OMR Material B-2 units 440 Other variable costs Fixed costs Total cost 890 Profit 110 Selling price 1.200 (ii) Labour These consist of the wages of full time, permanent staff in two categories: skilled staff, 1,000 hours at OMR10 per hour and unskilled staff, 500 hours at OMR 5 per hour. Skilled staff is currently working at full capacity and any additional work will require overtime working at a 50% premium. Unskilled staff levels are in excess of current requirements. If this contract is not obtained, some unskilled staff will be laid off at a cost of OMR1,500. (ii) Overheads The overheads comprise variable overhead incurred at a rate of OMRS per labour hour and general fixed overheads of the business charged at a rate of 100% of variable overhead. (iv) Supervisors' wages consist of OMR7,000 of existing supervisors' salaries plus an overtime allowance of OMR500 which would have to be paid if this contract is won. () Estimating & design costs were incurred to prepare the drawings and plans for this contract. Ali is facing a problem of estimating the cost based on the relevant costing principle, on the context of relevant costing principle and in the light of the above data available for ABC advice Ali bypreparinga report addressing the following: A. Discuss the concept and importance of relevant coting (10 marks) B. Calculate the cost estimate based on the relevant costing principle. (10 marks) C. Clearly state any assumptions made. (10 marks) D. Discuss importance of relevant costing principle for decision making. (10 marks) Task 2(1900 wordsvall The principle of relevant costing is primarily applicable where decisions have to be made. The inclusion of irrelevant information during the process, could lead to the incorrect decision being made. A relevant cost/income is anycost/income that will NOT be incurred if one decision is made instead of another. In the light of the discussion analyse and answer the question below. Aliisa Manager of the ABC who was asked to quote for a contract and prepare the following cost estimate for the job OMR Material - 500 units of a 50,000 Materials - 200 units of Other direct materials Labour costs 20,000 Subcontracted work 30.000 Supervisors' wages 7.000 Estimating & design Total cost The following additional information are wailable: Material 5.000 Pe Version Estimates are based on original cost. The company has so units of Ain stock - it has no other use other than reale OMR 30 per unit or as a substitute for another type of material which costs OMR 40 per unit. Material is in short supply and fresh supplies are not expected in the near ture, it is used on a regular product line which has the following details OMR Material B-2 units Other variable costs Total cost 190 6) Labour These consist of the wages of time, permanent staff in two categories sklled staff, 1.000 hours OMRIO per hour and united staff, 500 hours OMR 5 per hout. Stilled wall is currently werking tul capacity and any additional work will require overtime working at a ses premium United staff levels are in exces of current requirements, this contract is not obtained, some unskilled staff will be laid off at a cost of OMR500 Overheads The overheads comprise variable cerad incurred at a rate of OMS per labour hour and general Fond overheads of the business charged at a rate of 100% of variable head Supervisors' wages consist of OMR7,000 of existing supervisors salaries plus an overtime allowance of OMRSO which would have to be paid this contracts won Mieting & design costs were incurred to prepare the drawings and plans for this contract Alis facing a problem of estimating the cost based on the relevant casting principle on the context of relevant conting principle and in the light of the above data available for AC advice Al A Discuss the concept and importance of relevant cating (10 mars & Calculate the cost estimate based on the relevant costing principle (20 marts Clearly state any assumptions made (10 marks] D. Discuss importance of relevant costing principle for decision making 100 mark! Task 2 (1500 words equivalent) The principle of relevant costing is primarily applicable where decisions have to be made. The inclusion of irrelevant information during the process, could lead to the incorrect decision being made. A relevant cost/income is any cost/income that will NOT be incurred if one decision is made instead of another. In the light of the discussion, analyse and answer the question below. Ali is a Manager of the ABC who was asked to quote for a contract and prepare the following cost estimate for the job. OMR Materials - 500 units of A 50,000 41,000 Materials - 200 units of B Other direct materials 5,000 Labour costs 40,500 Overheads 20,000 Sub contracted work 10,000 7,000 10,000 Supervisors' wages Estimating & design Total cost The following additional information are available: 163,500 (1) Materials Pg.4 Version 1 350 100 Estimates are based on original cost. The company has 500 units of A in stock - it has no other use other than resale at OMR 30 per unit or as a substitute for another type of material which costs OMR 40 per unit. Material B is in short supply and fresh supplies are not expected in the near future; it is used on a regular product line which has the following details: OMR Material B-2 units 440 Other variable costs Fixed costs Total cost 890 Profit 110 Selling price 1.200 (ii) Labour These consist of the wages of full time, permanent staff in two categories: skilled staff, 1,000 hours at OMR10 per hour and unskilled staff, 500 hours at OMR 5 per hour. Skilled staff is currently working at full capacity and any additional work will require overtime working at a 50% premium. Unskilled staff levels are in excess of current requirements. If this contract is not obtained, some unskilled staff will be laid off at a cost of OMR1,500. (ii) Overheads The overheads comprise variable overhead incurred at a rate of OMRS per labour hour and general fixed overheads of the business charged at a rate of 100% of variable overhead. (iv) Supervisors' wages consist of OMR7,000 of existing supervisors' salaries plus an overtime allowance of OMR500 which would have to be paid if this contract is won. () Estimating & design costs were incurred to prepare the drawings and plans for this contract. Ali is facing a problem of estimating the cost based on the relevant costing principle, on the context of relevant costing principle and in the light of the above data available for ABC advice Ali bypreparinga report addressing the following: A. Discuss the concept and importance of relevant coting (10 marks) B. Calculate the cost estimate based on the relevant costing principle. (10 marks) C. Clearly state any assumptions made. (10 marks) D. Discuss importance of relevant costing principle for decision making. (10 marks)