Q $1.$ Excel Industries Ltd$.$ has been approached by a customer who would like a special job to

be done for him, and is willing to pay RO $150,000$ for it$.$

The job would require the following.

Materials

a$)$ Material $F$ is used regularly by Excel Industries Ltd$,$ and if units of F are required for this job,

they would need to be replaced to meet other production demands

b$)$ Materials $G$ and $H$ are in stock due to previous over$-$buying, and they have restricted use. No

other use could be found for material G$,$ but the units of material $H$ could be used in another

job as a substitute for $400$ units of material $J,$ which currently costs RO$10$ per unit $($of which

the company has no units in stock at the moment$).$

The labor requirements are as follows:

Skilled Labor: $800$ hours will be required. Currently $400$ idle hours are available which are being

paid at RO $80$ per hour. The normal rate of skilled labor is RO $100$ per hour. The remaining

hours will be hired from market at RO $100/$hour$.$

Semi$-$Skilled Labor: $600$ hours of Semi$-$skilled labor is required. This labour is in short supply and

will have to be shifted from other department. If the labor is shifted from the other

department, it will affect the production of Product $x.$ The product $x$ production and sales will

fall by $1,000$ units. The sale price of Product $x$ is $RO60$ per unit, while its variable cost is

RO $30.$ Semi$-$skilled labor is paid at RO $50$ per hour.

Unskilled Labor: Company does not have unskilled labor on payroll and this will be hired from

market @ RO $40$ per hour. $500$ hours of unskilled labor will be required.

Calculate the Relevant Cost of the Project and give your recommendations.