# Question

A company has 5 employees who have a cost of £100 per day each but currently have no work to do and this situation is expected to last for the next two weeks. The company is considering accepting a special order that will take 5 employees one week each, commencing immediately. The work will require supervision, equivalent to 10% of the direct labour time, but all supervisors are very busy. Supervision costs are normally £200 per day but additional supervision will involve overtime at the rate of £300 per day. The relevant cost for the order is:

a) £750

a) £750

## Answer to relevant Questions

A call centre department incurs costs of £100,000 per annum which provides the staff to make 25,000 sales calls each year. At the end of the year, management reports disclose that the actual number of calls made is 23,000. ...a. Calculate both the product cost (using standard accounting practices) and the relevant cost for this custom job b. What is the lowest price at which the tender should be submitted assuming we want to make a profit of ...Use the following costs per unit to identify the prime cost, total production cost and total cost for a product: c) 36, 72 & 85 The net present value of the investment, assuming a 7% cost of capital is: d) -£49,000 What would be the effect of these two alternatives on Quicker’s reported profits and what might be the likely motivational effects? What suggestions would you make?Post your question

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