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Concorde Ltd has been asked to quote a price for an order of 8 units of Product Delta. Making this product will require skilled labour,
Concorde Ltd has been asked to quote a price for an order of 8 units of Product Delta. Making this product will require skilled labour, which is currently in short supply and is paid 15 an hour. If the order is accepted, all necessary labour will have to be transferred from existing work. As a result, other orders will be lost. It is estimated that for each hour transferred to this contract 57 will be lost (calculated as lost sales revenue 85, less materials 13 and labour 15). The production manager believes that, owing to a learning process, the time taken to make each unit will reduce, from 20 hours to make the first one, by one hour a unit made. (That is 20 hours to make the rst one, 19 hours to make the second, 18 hours to make the third one and so on.) What is the total relevant cost of skilled labour for the purposes of the order'? The relevant cost for skilled labour will be will be A. Choudray (Engineering) Ltd makes a product that is sold for 105 per unit and has the following costs per unit: E Variable material cost 20 Labour cost 34 Share of xed costs 22 76 The labour cost includes 2 hours' charge for assemblers who are paid 12 per hour. The business is considering sub-contracting the assembly work as demand for the product outstrips the ability of the business to assemble the pans that are produced to make the product. What is the maximum price that the business should be prepared to pay to have one unit of the product assembled? O A. 71 0 B. 22 0 C. 54 0 D. 24 Turin Ltd has been asked to give a quote for making a large piece of earth-moving equipment. The order will require 80 units of Component 8530. There are 20 units of this component already held by the business, which cost 45 each. They have a resale value of 30 each. The business uses this component on a regular basis and was about to place an order for 30 more units at a cost of 50 each. If, however, an order of more than 70 units is placed, the cost of Component 8530 will reduce to M0 each. What is the relevant cost of Component 8530 for the purposes of the quote? (Enter an integer.)
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