Question: Question 3 (a) i. Explain briefly what you understand by the term relevant cost? (2 marks) ii. Give 2 examples of costs that would be

Question 3 (a) i. Explain briefly what you understand by the term "relevant cost? (2 marks) ii. Give 2 examples of costs that would be considered firrelevant' in decision-making? (2 marks) iii. You are to state what the relevant cost of Material X would be for Indigo Ltd for a new contract in the following scenarios: a. Material X is currently in stock and is used regularly by the company in the normal course of production. marks) (2 b. Material X is currently in stock as a consequence of previous over-buying but it is no longer used by Indigo Ltd in normal course of production (2 marks) iiii. A company is evaluating a contract which requires 100 skilled labour hours. This type of labour is paid 20 per hour and is part of the company's permanent workforce. If the company has enough spare capacity to undertake this contract, what would be the relevant cost of labour to the company? (2 marks)

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