Question A4 Saylor Ltd is considering a new contract that will require four additional skilled employees. Each of the employees could be recruited on a one year contract at £50,000 per employee. The staff will require to be managed by an existing manager who currently earns £100,000 per annum. This contract will probably take around 20% of the manager's time to supervise. As an alternative, the company could retrain existing staff who currently earn £40,000 per annum. The retraining costs will be £20,000 and if these staff were used they would need to be replaced at a cost of £125,000. Required: Identify the relevant labour costs of the contract.

Question A4 Saylor Ltd is considering a new contract that will require four additional skilled employees. Each of the employees could be recruited on a one year contract at £50,000 per employee. The staff will require to be managed by an existing manager who currently earns £100,000 per annum. This contract will probably take around 20% of the manager's time to supervise. As an alternative, the company could retrain existing staff who currently earn £40,000 per annum. The retraining costs will be £20,000 and if these staff were used they would need to be replaced at a cost of £125,000. Required: Identify the relevant labour costs of the contract.

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter10: Short-term Decision Making

Section: Chapter Questions

Problem 16PB: At Stardust Gems, a faux gem and jewelry company, the setting department is a bottleneck. The...

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