A. Creative Solutions Limited received an enquiry from St. Ives Diamonds about a printing job. The St. Ives will release its latest jewellery collection and asked Creative Solutions to print the catalogue based on St. Ives's specific requirements.

Creative Solutions faces stiff competition from its business rivals and is therefore hoping to secure this lucrative order. The followings are details related to the job prepared by the production department:

Paper 10 reams @ RM150.00 per ream.

Ink and other printing material RM5,000.00.

Binding material and other consumables RM3,000.00.

Some photography is required for the job. However, Creative Solutions does not have a photographer as an employee. The company decides to hire one by paying RM10,500.00 to him. Estimated job card prepared by production department specifies that service of following employees will be required for this job:

Artist - 60 hours (RM12,000.00 per month).

Copywriter - 50 hours (RM10,000.00 per month).

Client servicing - 30 hours (RM8,000.00 per month).

Additional information provided are as follows:

The primary packing material will be required and the cost is RM2,500.00.

Production Overheads are 20% of direct cost, while the Selling and Distribution Overheads are likely to be 10% on Production Cost.

The agency expects a profit of 20% on the quoted price.

The agency works 25 days in a month and 8 hours a day.

Required:

Determine the price to be quoted to St. Ives Diamonds, clearly identifying Prime Cost, Production Cost and Total Cost.

B. The following balances were extracted from the books of SP Construction for Contract No. 123 on 31st March, 2020:

RM

Materials issued to site 627,200.00

Wages paid 734,550.00

Outstanding wages (as at 31 March 2020) 7,200.00

Plant (cost) (depreciation of plant is 25 per cent) 60,000.00

Direct charges paid 25,150.00

Outstanding direct charges (as at 31 March 2020) 2,100.00

Establishment expenses 56,500.00

Stock of materials at site (as at 31 March 2020) 12,000.00

Work certified (as at 31 March 2020) 1,650,000.00

Cost of work not yet certified 35,000.00

Cash received after deduction of 5 percent

retention money 1,410,750.00

The work was commenced on April 1, 2019 and the contract price agreed at RM2,450,000.00.

Required:

Prepare contract account for the year ended 31st March, 2020.