Question: A company is considering accepting a one-year contract, which will require four skilled employees. The company could retrain four of its existing employees who currently

A company is considering accepting a one-year contract, which will require four skilled employees. The company could retrain four of its existing employees who currently earn 30,000 each per year. The training would cost 15,000 in total. If these employees were to work on this contract, they would need to be replaced for the duration of the contract at a total cost of 100,000. The trained employees would be supervised by an existing manager who earns 60,000 per year. It is expected that supervision of the contract would take 10% of the managers time.

What is the relevant labour cost of accepting the contract?

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