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ThemanagementofCroesusLtd.isconcernedaboutincreasinglabourturnoveratthecompanysfactoryandwantstodeterminetheprofitforegonebecauseoflabourturnoverlastyear.AcostanalystatCroesushasestablishedthefollowing: 1.LastyearstotalsalesamountedtoR8600000,andthelossofcontributionisapproximately20%oflostsalesasaresultoflabourturnover. 2.ThetotalnumberofactualhoursworkedbythedirectLabourforcewas450000hours.Theactualdirectlabourhoursincluded30000hoursattributabletotrainingnewrecruits,outofwhich,two-thirdsofthehourswereunproductive. 3.Asaresultofthedelaysbythehumanresourcesdepartmentinfillingvacanciesduetolabourturnover,100000productivehourswerelost. Thesubsequentcostincurredonlabourturnoverrevealed,onanalysis,thefollowing: R Settlementcostduetoleaving: 43800 ...

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Accounting

ThemanagementofCroesusLtd.isconcernedaboutincreasinglabourturnoveratthecompanysfactoryandwantstodeterminetheprofitforegonebecauseoflabourturnoverlastyear.AcostanalystatCroesushasestablishedthefollowing:

1.LastyearstotalsalesamountedtoR8600000,andthelossofcontributionisapproximately20%oflostsalesasaresultoflabourturnover.

2.ThetotalnumberofactualhoursworkedbythedirectLabourforcewas450000hours.Theactualdirectlabourhoursincluded30000hoursattributabletotrainingnewrecruits,outofwhich,two-thirdsofthehourswereunproductive.

3.Asaresultofthedelaysbythehumanresourcesdepartmentinfillingvacanciesduetolabourturnover,100000productivehourswerelost.

Thesubsequentcostincurredonlabourturnoverrevealed,onanalysis,thefollowing:

R
Settlementcostduetoleaving: 43800
Recruitmentcosts 28000
Selectioncosts: 12750
Trainingcosts 35450

Required:

Ifthelostproductionbecauseoflabourturnovercouldhavebeenavertedatprevailingprices,findtheprofitforegonelastyearonaccountoflabourturnover.

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