- This topic has 5 replies, 2 voices, and was last updated 9 years ago by
.
- Posts
Sir,
A question in bpp requires the relevant cost for the following scenario.
30 hours of work from a member of staff is required to perform an urgent job for a client. The employee is paid $20p.h , however for work for clients he is paid @ $45p.h. No other member of staff can perform this job.
The answer provided is 30 hours @ 45 = 1350.
Sir, is it not 30 hours @ $(45-20) because that is the extra he is paid for performing the job (since he is already being paid $20 as an employee)Assuming that you have copied it exactly, then I agree with you (and it is very poor of BPP!).
Sir!!
This is an extract of the question:The job would require the following:
30 hours of work from one member of staff, who is paid on an hourly basis, at a rate of $20 per hour, but who would normally be employed on work for clients where the charge-out rate is $45 per hour. No other member of staff is able to do the member of staff in question’s work.I hope this doesn’t change your answer!!
Yes – that does change the answer 🙂
The employee will be paid $20 per hour whether he works on the new contract or not. So that is not relevant.
However, if he works on the new contract then the company will not be able to earn the 45 per hour that he is currently earning.
So there is an opportunity cost (lost income) of $45 per hour. The new contract needs to generate at least $45 per hour for it to be worthwhile taking the employee away from his existing work.Thank you so much, sir!! I didn’t realize that the $45 per hour was actually an income that the employee was earning to the company. I’m sorry for misleading you initiallhy
- You must be logged in to reply to this topic.