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Halford Manufacturing Limited is considering whether to accept a contract to produce a special order which would require 1500 labour hours.
Labour is normally paid 15$ per hour, with double time paid for any overtime worked. If the special product is produced, the additional hours would all be worked as overtime. In addition, a number of other jobs, which would make a contribution of 1800$ could not be carried out.
Question 1: What is the relevant cost of labour (in $) in evaluating this special product?
Option a) 22,500
Option b) 43,200
Option c) 45,000
Option d) 46,800
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