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a company is considering a one year contract which will require 4 skilled employees. the 4 skilled employees will be recruited on a one year contract at a cost of $40,000 per employees . the employees will be supervised by an existing manager who earns $60,0002 per annum . it is expected that supervision of the contract would take 10% of the managers time.
instead of recruiting new employess the company could retain some existing employees who currently earns $30,000 per year . the new training would cost $15000 in total. if the employees were used htey would need to be replaced at a total cost of $100,000.
what is the relevant labour cost of the contract ?
sir, i dont know what is relevant cost and how to calculate above question . please help me sir !!!
Thank you
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