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arpita205
Jan 26, 2009, 01:58 AM
In case of permanent labour, & co. is working at full capacity, why relevant cost of labour for additional order is hourly labour rate + lost contribution per hour.

I can understand that since there is lost of contribution due to redeployment of labour, but why labour hourly rates are also treated as relevant cost.

My thinking says that since labour is permanent one, labour will be paid irrespective of the fact that whether he is working for this additional contract or not.

Please help me in correcting my thinking.