CIPS L3M3 Exam - Topic 4 Question 24 Discussion

Actual exam question for CIPS's L3M3 exam

Question #: 24
Topic #: 4

[All L3M3 Questions]

Which of the following would not normally be included in a whole life cost calculation?

APurchase price

BCost of setting up the tender

CDefective work, which needs to be rectified.

DInventory costs

Show Suggested Answer

Suggested Answer: B

Consideration is one of the essential elements of a contract in English law, and it essentially means the exchange of something of value for something else of value, typically goods or services for money.

Normally it is the price to be paid in exchange for goods or services.

by Ligia at Sep 17, 2024, 02:20 PM

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Danica

6 months ago

Really? I thought all costs should be considered.

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Aileen

6 months ago

Yeah, I think setting up the tender is part of it too.

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Margo

6 months ago

Wait, are you saying defective work isn't included?

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Tran

7 months ago

Definitely not inventory costs!

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Linn

7 months ago

Whole life cost usually includes purchase price.

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Kenia

7 months ago

I feel like inventory costs might not be relevant here, but I can't recall if they are ever excluded in whole life cost calculations.

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Josphine

7 months ago

I practiced a similar question where defective work was mentioned, and I think that should be included in whole life costs.

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Adelle

7 months ago

I think the purchase price is definitely part of the calculation, but I'm a bit confused about the setup costs.

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Malcolm

8 months ago

I remember discussing whole life costs in class, but I'm not sure if inventory costs are typically included.

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Margart

8 months ago

Ah, this is a tricky one. I remember discussing whole life costing in class, but I can't quite recall all the specific elements that are included. I'll have to review my notes and try to reason this through step-by-step.

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Lai

8 months ago

Okay, let me see. The whole life cost is supposed to capture all the costs over the lifetime of the asset, right? So inventory costs would definitely be part of that. I'm leaning towards D as the answer.

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Lennie

8 months ago

I'm pretty confident about this one. The whole life cost calculation should include the purchase price, but not the cost of setting up the tender, which is more of an administrative expense.

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Launa

8 months ago

Hmm, I'm a bit unsure about this. I know the whole life cost includes things like maintenance and operating costs, but I'm not sure if defective work would be part of that. I'll have to think this through carefully.

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Whitney

1 year ago

Hmm, I wonder if the answer is a riddle in itself. 'What gets included in a whole life cost calculation, yet isn't normally there?' Ooh, the suspense!

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Glory

11 months ago

D) Inventory costs

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Lourdes

11 months ago

C) Defective work, which needs to be rectified.

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Natalie

11 months ago

B) Cost of setting up the tender

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Arminda

12 months ago

A) Purchase price

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Odelia

1 year ago

Whole life cost calculation? Sounds like a lot of fun, can I use a calculator that looks like a Bat-signal?

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Francisca

11 months ago

C) Defective work, which needs to be rectified.

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Rosalind

11 months ago

B) Cost of setting up the tender

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Latrice

12 months ago

A) Purchase price

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Virgie

1 year ago

Wait, what? Inventory costs? Is this a trick question or something? That's gotta be the answer, right?

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Sherron

11 months ago

Got it, thanks for clarifying!

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Adolph

12 months ago

The cost of setting up the tender is usually not included in the calculation.

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Hyman

12 months ago

Oh really? So, what would not normally be included then?

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Tijuana

12 months ago

No, inventory costs are actually included in a whole life cost calculation.

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Rikki

1 year ago

D) Inventory costs

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Dylan

1 year ago

C) Defective work, which needs to be rectified.

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Audra

1 year ago

C) Defective work, which needs to be rectified.

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Frankie

1 year ago

B) Cost of setting up the tender

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Latanya

1 year ago

B) Cost of setting up the tender

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Olen

1 year ago

A) Purchase price

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Elmer

1 year ago

A) Purchase price

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Jennifer

1 year ago

Inventory costs? Really? That seems a bit specific to include in a whole life cost calculation. I'm not convinced that's a normal consideration.

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Amber

1 year ago

I think the cost of rectifying defective work is a tricky one. It's not always clear if that should be included or not.

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Micheal

1 year ago

I think it depends on the specific situation and how significant the defective work is.

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Suzi

1 year ago

I agree, it can be difficult to determine if the cost of rectifying defective work should be included in the calculation.

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Aja

1 year ago

D) Inventory costs

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Iesha

1 year ago

C) Defective work, which needs to be rectified.

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Tatum

1 year ago

B) Cost of setting up the tender

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Lenna

1 year ago

A) Purchase price

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Laticia

1 year ago

But what about A) Purchase price? Shouldn't that be included as well?

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Jillian

1 year ago

I agree with Desirae, because inventory costs are not directly related to the whole life cost calculation.

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Rocco

1 year ago

Hmm, the purchase price is definitely included in a whole life cost calculation. I'm not so sure about the cost of setting up the tender though.

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Paola

12 months ago

D) Inventory costs

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Isadora

1 year ago

C) Defective work, which needs to be rectified.

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Ettie

1 year ago

B) Cost of setting up the tender

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Rolf

1 year ago

A) Purchase price

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Desirae

1 year ago

I think D) Inventory costs would not normally be included.

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