Answer Happy

Question 2 a. A decision has to be made whether to use production method A or B. The cost figures are as follows: Method B Method A Expected Costs Costs Expected costs next Last last costs next Year year year C C C Fixed costs 5,000 5,000 Variable costs per unit: Labour 2 Materials 12 15 10 Required: Calculate the relevant cost of method A and B. (4 marks) b. ZW Ltd is pricing a job that involves the use of 20 hours of skilled labour and 50 hours of semi-skilled labour. The four existing skilled workers are paid C15 per hour with a minimum weekly wage of C450. They are currently working 24 hours a week. The semi-skilled workforce is currently fully utilized. They are each paid C10 per hour, with overtime payable at time and a half. Additional workers may be hired for C12 per hour. Required: Find the relevant labour cost for ZW Ltd's job (4 marks) 7,000 6 year C 7,000 12