This question is on relevant costs. If a company is assessing a business proposal from a retail mall to supply the retail mall meat and other livestock products. And to supply these, the company needs to acquire a meat processing plant. Incidentally, the acquisition of the meat processing plant is in the company's strategic plan for the coming year and the board is currently considering it because customers have been demanding for processed meat in kilograms. Will the cost of the meat processing plant be a relevant cost in assessing whether to accept the retail mall contract?See attached images for full details.

Detoy Farms and Farm Products Limited: Business opportunities There are currently two proposals for business opportunities before the below. board of Detoy farms. Details of these business opportunities are stated Retail contract with "The Shop" "The Shop" is a retail mall catering for the middle and high class of the society. It has its various stores in different locations within the cities of Lagos, Ibadan and Abeokuta, all within fifty killometres to Detoy Farms. "The shop" retails virtually everything that meet the need of its teeming customers, from fashion to household domestic needs such as drinks, spirits, utensils, meat and vegetables. "The Shop" has contacted Detoy Farms, through its marketing department for a business relation. The Shop is willing to enter into a long-term contract with Detoy Farms for constant supply of fresh farm products, such as meat, poultry, fish and vegetables to its various shops. These products are currently being imported from South Africa by The Shop. If this contract sails through, Detoy Farms will be supplying The Shop with these farm products and The Shop will stop all importation. However, these products are to be supplied in kilograms and packed in special packages that will be specified by The Shop. If Detoy Farms accepts the contract, it will necessitate Detoy Farms establishing an integrated meat processing plant in the farm to be able to meet the specification of The Shop. Incidentaly, this is in line with Detoy's Farms strategic plan for the coming year. Installing an integrated meat processing plant In view of the various enquiries Detoy Farms has been receiving from its customers, the board is currently considering the establishment of an integrated meat processing plant on the farm. The plant will be capable of processing various meat from cattle to poultry. It will comprise of slaughtering slabs, de-skinning/de-feathering to packing the meat in various kilograms packs. The plant will be expected to supply fresh meat to the various meat retail stores within 50 kilometres radius to the farm. The installation of the plant will also help Detoy Farms to supply fresh meats to its various customerswho have been wishing to be able to buy their meatsupplies fresh from the farm but are unable to buy a whole live animal, as it is currently being sold by the farm. The farm currently has a portion of the farmland that could be used for this project. However, the farm would have to construct a new structure to house the plant and procure the following: Meat processing machinery; Equipment; and . Motor vehicles