Netherfield Ltd is considering a contract to produce a particular product. The product will require the...

 

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Netherfield Ltd is considering a contract to produce a particular product. The product will require the use of eight hours skilled labour and four hours semi-skilled labour. The skilled employee is paid £16 per hour and is currently employed on other work. Someone would need to be recruited on a temporary basis to do this other work at a cost of £18 per hour. A semi-skilled employee is available to help produce the product and is paid £13 per hour. There is currently no other work for this employee. What is the relevant labour cost of this contract? Netherfield Ltd is considering a contract to produce a particular product. The product will require the use of eight hours skilled labour and four hours semi-skilled labour. The skilled employee is paid £16 per hour and is currently employed on other work. Someone would need to be recruited on a temporary basis to do this other work at a cost of £18 per hour. A semi-skilled employee is available to help produce the product and is paid £13 per hour. There is currently no other work for this employee. What is the relevant labour cost of this contract?

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