[Silmiya22]

Jon sir what is the direct labour cost and How to calculate the surplus contribution sir?

[Silmiya22]

actually john sir ,seriously i am finding difficult to get the answer……………and this question was there in my practice tutes..so there no answer to be found in the book..

[Silmiya22]

hi john…..

I’ve come across part of a difficult question which confused me alot. It’s a relevant costing question which states the following:

The labour requirement for a special contract is 250 skilled labour hours ( paid $10 per hour ) and 750 semi skilled labour hours ( paid $8 per hour ).

At present skilled labour is in short supply, and all such labour used on this contract will be at the expense of other work which generates $12 contribution per hour (after charging labour costs).There is currently a surplus of 1200 semi skilled labour hours, but the company currently has a policy of no redundancies.

The relevant cost of labour for the special contract is :

A) $3000
B) $ 5500
C) $8500
D)$ 9000

Please help me to solve this question!!!!

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