The management of a company wants to have an idea of the profi t lost/foregone as a result of labour turnover last year.

worked by the direct labour was 17,250. As a result of the delays by the personnel department in fi lling the vacancies due to labour turnover, 3,750 potential productive hours were lost. The actual direct labour hours included were 1,500 hours attributable to training new recruits, out of which half of the hours were productive. The costs incurred consequent upon labour turnover revealed on analysis the following:

Assuming that the potential production lost due to labour turnover could have been sold at the prevailing prices, ascertain the profi t foregone last year on account of labour turnover.

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Last year, the sales accounted to Rs. 3,30,000 and the Profit Volume Ratio was 20%. The total number of actual hours