Hi sir i checked the answer for part b the only thing i dont understand is the labour cost calculation “(100,000*0.5*$24) +(200,000*0.5*$26)=(3,800,000) why did they use $24,26 shouldnt it be $40,42?
It says in part (b) of the question that the labour cost is $24 in year 2 and $26 in year 3. The rest of the variable cost is not affected by the labour hours.