Your organization is experiencing a high labor turnover in recent years, and management would like you to submit a report on the loss suffered by the company due to such labor turnover. Following figures are available for your consideration.
Sales: Rs.600 lakhs
Direct materials: Rs.150 lakhs
Direct labor: Rs.48 lakhs on 4, 80, 000 man hours
Other variable expenses: Rs.60 lakhs
Fixed overheads: Rs.80 lakhs
The direct man hours include 9000 man hours spent on trainees and replacements, only 50% of which were productive. Further, during the year 12, 000 man-hours of potential work could not be availed of because of delayed replacement. The cost incurred due to separation and replacements amounted to Rs.1 lakh. On the basis of the above data, prepare a comparative statement showing actual profit vis-à-vis the profit which would have been realized had there been no labor turnover.