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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

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:

a. $2,195

b. $2,285

c. $2,460

d. $2,485

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