Business – 2.1 HRM – Training and development | e-Consult
2.1 HRM – Training and development (1 questions)
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First, calculate the additional profit per month:
- Increase in units per month = 9,200 – 8,000 = 1,200 units
- Increase in profit per unit = £5.50 – £5.00 = £0.50
- Additional profit from higher output = 1,200 × £5 = £6,000
- Additional profit from higher margin = 9,200 × £0.50 = £4,600
- Total additional profit per month = £6,000 + £4,600 = £10,600
Annual additional profit = £10,600 × 12 = £127,200
Net benefit = Annual additional profit – Training cost
Net benefit = £127,200 – £120,000 = £7,200
ROI = (Net benefit ÷ Training cost) × 100%
ROI = (£7,200 ÷ £120,000) × 100% = 6%
Thus, the training yields an annual net benefit of £7,200 and an ROI of 6%.