Indicate the minimum price at which the contract could be undertaken, such that the business would be neither better nor worse off as a result of doing it.

Andrews and Co. Ltd has been invited to tender for a contract. It is to produce 10,000 metres

 

of an electrical cable in which the business specialises. The estimating department of the business has produced the following information relating to the contract:

Materials: The cable will require a steel core, which the business buys in. The steel core is

to be coated with a special plastic, also bought in, using a special process. Plastic for the

covering will be required at the rate of 0.10 kg/metre of completed cable.

Direct labour: Skilled: 10 minutes/metre; Unskilled: 5 minutes/metre.

The business already holds sufficient of each of the materials required to complete the

contract. Information on the cost of the inventories is as follows:

The steel core is in constant use by the business for a variety of work that it regularly undertakes.

The plastic is a surplus from a previous contract where a mistake was made and an

excess quantity ordered. If the current contract does not go ahead, this plastic will be scrapped.

Unskilled labour, which is paid at the rate of £7.50 an hour, will need to be taken on specifically

to undertake the contract. The business is fairly quiet at the moment which means that

a pool of skilled labour exists that will still be employed at full pay of £12 an hour to do

nothing if the contract does not proceed. The pool of skilled labour is sufficient to complete

the contract.

Required:

Indicate the minimum price at which the contract could be undertaken, such that the business

would be neither better nor worse off as a result of doing it.

find the cost of your paper

Determine the trust’s Net Income For Tax Purposes and Taxable Income for the current year.

During the current year, the Jordan family trust, an inter vivos trust, has business income of $220,000. Of this amount, $50,000 is retained in the trust with a joint election….

Indicate the tax effects of these transactions on the Net Income For Tax Purposes for both the trust and for Bryan.

During 2020, the Ho family trust received eligible dividends from publicly traded Canadian corporations in the amount of $100,000. In addition, it received non-eligible dividends from the family owned Canadian….

compare the tax consequences for both Martin and the trust if the sale takes place in December 2020

The Husak family trust has only one beneficiary, Martin Husak, the 32 year old son of the settlor, Dimitri Husak. It is an inter vivos trust and its only asset….