DECEMBER 2011 Q4(B)

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May 19, 2014 at 8:37 pm #169555
Abi
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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?
May 21, 2014 at 8:43 am #169801
John Moffat
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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.
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