CIMA Exam CIMAPRO19-P01-1 Topic 10 Question 73 Discussion

Actual exam question for CIMA's CIMAPRO19-P01-1 exam

Question #: 73
Topic #: 10

The labour requirement for a special contract is 250 skilled labour hours paid at $10 per hour and 750 semi-skilled labour hours paid at $8 per hour.

At present, skilled labour is fully utilised on other contracts which generate a $12 contribution per hour, after charging labour costs. Additional skilled labour is unavailable in the short term.

There is a surplus of 1,200 semi-skilled hours over the period of the contract but the firm has a policy of no redundancies.

The relevant cost of labour for the special contract is:

A$ 5,500

B$ 3,000

C$ 8,500

D$ 11,500

Show Suggested Answer

Suggested Answer: A, B, D

References:

by Brandon at Aug 07, 2023, 05:10 PM

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Dana

2 days ago

I see both points, but I think the answer is D) $11,500 because we need to factor in the contribution per hour from other contracts.

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Christoper

8 days ago

I disagree, I believe the answer is C) $8,500 because we need to consider the opportunity cost of using skilled labour on other contracts.

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Jacinta

12 days ago

I think the answer is B) $3,000 because we have a surplus of semi-skilled hours.

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