Sapphire Marine is specialized in manufacturing of leisure fishing boats in Oman. The company hired the specialized workers who will be engaged only on manufacturing leisure fishing boats and were paid at RO 40 per hour. The company believes that as the workers are doing the same task repeatedly, there will 90% learning curve ratio applicable to all labour related costs.

The company produced its first lot of 10 fishing boats at an average time of 60 hours per boat.

The variable overhead cost is assigned to the boats at the rate of RO 20 per labour hour.

(Note : Round off all calculations to one digit after decimal point. For example 25.783 as 25.8)

If the company plans to produce a total output of 80 boats, then the total labour and labour related costs will be

Select one:

a. RO 679,680

b. RO 377,280

c. RO 209,760

d. RO 116,640

Answer rating: 100% (QA)

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