Question
29. Barcelona Ltd, a modern painting business, has received an inquiry from a potential customer for a painting. The pricing policy of the business is
29. Barcelona Ltd, a modern painting business, has received an inquiry from a potential customer for a painting. The pricing policy of the business is based on the budgeted financial data for the coming year. The data for the coming year is shown below: Sales $550,000 Direct materials 50,000 Direct labour 300,000 Variable overhead 5,000 Advertising for business 5,000 Depreciation on equipment 30,000 Other fixed overhead costs 37,000 Profit before tax 133,000 Other relevant information: Management has budgeted for 20,000 direct labour hours. Overhead is applied based on direct labour hours. An estimate for the direct costs of the job to be quoted on is shown below: Direct materials $400 Direct labour (100 hours) $1,500 The recommended quote for the job is: Select one: $2,485 $2,460 $2,285 $2,195
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