A contract is under consideration which would require 1,400 hours of direct labour. There is spare capacity of 500 hours

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A Contract Is Under Consideration Which Would Require 1 400 Hours Of Direct Labour There Is Spare Capacity Of 500 Hours 1 (251.3 KiB) Viewed 47 times

A contract is under consideration which would require 1,400 hours of direct labour. There is spare capacity of 500 hours of direct labour, due to the cancellation of another order by a customer. The other time would have to be found by asking employees to work in the evenings and at weekends, which would be paid at 50% above the normal hourly rate of R15. Alternatively, the additional hours could be found by switching labour from other work which earns a contribution of R5 per hour. Required: Calculate the relevant cost of direct labour if the contract is accepted and undertaken.