Hi all,
Another one…
If I can get 200 extra units produced per day for an extra $109.2 per day with unskilled labour, OR
… an extra 300 extra units produced per day for an extra $160 per day with semi-skilled labour…
… I would logically go with whatever is the cheapest cost per unit.
So in this case 200 units / $109.2 = $1.83 labour cost per unit, and …
… 300 units / $160 = $187.5 labout cost per unit.
On that basis, unskilled labour appears to me to be the way to go on the basis of cost. I know the correct answer is the inverse however. Can somebody explain please?!