Zipper Ltd. incurs the following costs to provide each “Special Delivery Service” for its customers:
|
Variable labour |
$25 |
|
Variable vehicle costs (fuel, etc.) |
$10 |
|
Fixed vehicle costs |
$18 |
|
Administrative support (overtime cost) |
$ 5 |
Zipper is considering outsourcing the service and wants to determine the relevant cost of each Special Delivery 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 Special Delivery Service is
- $35
- $28
- $10
- $5