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What is marginal cost for benefit in kind?

A client leases in an asset by the hour on an as necessary basis. The lessor buys consumables, goods and services from the client for the asset. These are provided by the client at a profit. The consumables are directly related to the hourly usage. The services and the goods are only partially directly related to the hourly usage though the average cost can be expressed on a per hour basis.

For a benefit in kind marginal cost calculation, is it the lease cost, the lease cost less the profit on the consumables or the lease cost less the profits on the consumables, goods and services that should be used? I can see arguments for all three though clearly the third option is preferred.


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31st Jul 2012 16:13

Any ideas?

I am sorry the question is a bit dry but it is difficult to add much more detail without risking the client becoming identifiable.

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