Cleverclogs is short of labour for a new one-off project needing 600 hours of labour and has choices as to where to source this. He could hire new people temporarily from an agency at a cost of $9 per hour. Alternatively he could recruit new temporary staff at a fixed cost of advertising of $1,200 but then only pay $6 per hour for the time. He could also redirect some staff from existing work who are currently paid $7 per hour and who make sandals that generate a contribution of $3 per hour after all variable costs. Sandals are a good selling product and Cleverclogs will lose the production and the related sales whilst staff is working on the new one-off project. What is the relevant cash flow?
A、$1,800
B、$3,600
C、$4,200
D、$4,800
A、$1,800
B、$3,600
C、$4,200
D、$4,800
【参考答案及解析】
The options are: Agency 600 × $9/hr = $5,400 Internal transfer 600 × (7 + 3) = $6,000 Hire new $1,200 + (600 × $6/hr) $4,800 Cleverclogs would select the lower of the costs and so this is the relevant cash flow.
The options are: Agency 600 × $9/hr = $5,400 Internal transfer 600 × (7 + 3) = $6,000 Hire new $1,200 + (600 × $6/hr) $4,800 Cleverclogs would select the lower of the costs and so this is the relevant cash flow.