General Studies · Relevant Costing
Nexus Co is evaluating a special 1-year contract requiring 4,000 hours of skilled labour, paid $15/hour. Skilled labour is in short supply and fully occupied on other work that generates a contribution of $10/hour (after deducting the $15 labour cost). If moved to the new contract, they cannot be replaced for the existing profitable work. What is the total relevant cost of skilled labour for this project?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1$60,000
- 2$40,000
- 3$100,000✓
- 4$160,000
Correct answer
$100,000
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