Liwewe is a manufacturing company located in the Bibiani producing and supplying furniture to second cycle institutions in Ghana. The company regularly uses material redwood for its products. For a while, the company is unable to obtain adequate raw redwood. It currently has 200kg in inventory for which it purchased at GH300/kg two years ago. Since then, the market price keeps rising by 15% per annum. However, if the company decides to re-sell redwood already in stock it can do so at GH220/ kg. A customer has placed an order for the production of a product ABOBO that uses 600kg of the redwood. The manufacturing of the product requires 40 hours of labour. The Company currently produces the product MONA that can be sold at GH80. The standard cost details of MONA are shown below Direct Materials 10kg at GH2/kg Direct Labour 5hrs at GH7/hr

Required: a) What is the relevant cost of labour if labour is in short supply?

b) What is the relevant cost producing the ABOBO in the light of short supply of scarce kindly show working explanation needed thanks