Promptprint Ltd, a printing business, has received an enquiry from a potential customer for the quotation of a price for a job. The pricing policy of the business is based on the plans for the next financial year shown below.

Required:

(a) Prepare a recommended price for the job based on the plans, commenting on your method, ignoring the information given in the Appendix (below).

(b) Incorporate the effects of the information shown in the Appendix (below) into your estimates of the direct material cost, explaining any changes you consider it necessary to make to the above direct material cost of £4,000.

Transcribed Image Text:

Sales revenue (billings to customers) Materials (direct) Labour (direct) Variable overheads Maintenance Depreciation Rent Heat and light Profit A first estimate of the direct cost for the particular job is: Direct materials Direct labour 196,000 (38,000) (32,000) (2,400) (3,000) (27,600) (36,000) (8,000) 49,000 E 4,000 3,600