Question

A company incurs the following costs to provide each job service for its customers:

Variable labour   $25
Variable vehicle costs    $10
Fixed vehicle costs   $18
Administrative support    $5
A company is considering outsourcing the service and wants to determine the relevant cost of each service, assuming that its variable labour could be made redundant at no cost to the business and vehicles could be sold at statement of financial position values. The unavoidable cost for each service is:

Select one:
a. $35
b. $28
c. $10
d. $5

Answer 1

^{Answer : Option D). $ 5}

^{For any clarifications please comment.}

^{Thank you.}