The management of B.R Ltd. is worried about their increasing employee turnover in the factory and before analyzing the causes and taking remedial steps, it wants to have an idea of the profit foregone as a result of employee turnover in the last year. Last year sales amounted to 83,03,300 and P/N ratio was 20 per cent. The total number of actual hours worked by the direct employee force was 4.45 lakhs. As a result of the delays by the Personnel Department in filling vacancies due to employee tumover, 1,00,000 potentially productive hours were lost The actual direct employee hours included 30,000 hours attributable to training new rearuits, out of which half of the hours were unproductive. The costs incurred consequent on lemployee turnover revealed, on analysis, the following: Settlement cost due to leaving 43,820 Recruitment costs 26,740 Selection costs 12,750 Training costs 30,490 Assuming that the potential production lost as a consequence of employee turnover could have been sold at prevailing prices, FIND the profit foregone last year on account of employee turnover.

The management of B.R Ltd. is worried about their increasing employee turnover in the factory and before analyzing the causes and taking remedial steps, it wants to have an idea of the profit foregone as a result of employee turnover in the last year. Last year sales amounted to 83,03,300 and P/N ratio was 20 per cent. The total number of actual hours worked by the direct employee force was 4.45 lakhs. As a result of the delays by the Personnel Department in filling vacancies due to employee tumover, 1,00,000 potentially productive hours were lost The actual direct employee hours included 30,000 hours attributable to training new rearuits, out of which half of the hours were unproductive. The costs incurred consequent on lemployee turnover revealed, on analysis, the following: Settlement cost due to leaving 43,820 Recruitment costs 26,740 Selection costs 12,750 Training costs 30,490 Assuming that the potential production lost as a consequence of employee turnover could have been sold at prevailing prices, FIND the profit foregone last year on account of employee turnover.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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