bec Lecture and W. THUS (d) Dream Home Builders has been asked to give a quote for a project. It has the following information available about the costs: Item Detail Direct Materials Bricks 200,000 at 100 per 20,000 thousand. 200,000 at 120 per 24,000 thousand. Other Materials 5,000 Note 2 Direct Labour Skilled 3,200 hrs at 12 per hour 38,400 Unskilled 2,000 hrs at 6 per hour 12,000 Note 4 Other Costs Scaffolding hire 3,500 Note 5 Depreciation of general-purpose machinery | 2,000 Note 6 General 5,200 hrs at 1 per hour 5,200 Note 7 overheads Plans 2.000 Note 8 Total Cost 112,100 Profit 22.420 Note 9 Suggested Price 134,520 Notes: 1. The contract requires 400,000 bricks of this standard type. The builder has 200,000 already in stock and will need to buy 200,000. The 200,000 at 100 per 1,000 in the quote above were bought at that price earlier in the year. The current replacement cost for this type of brick is 120 per 1,000. If the bricks are not used on this project the builder is confident that he will be able to use them later on in the year. Question Continued Lecture and W. https:// www.bb... https://WWW.DU... TIPS://WWW.UU... . .. . . . Page 4 2. This is the purchase price of other materials that will be bought in as required. 3. The builder intends to work 800 hours of the skilled work himself and hire the rest in on an hourly basis at 12 per hour. If the builder does not take on this job he can either work for other builders at 12 per hour or complete urgently required work to his own house for which he has been quoted 12,000 by another builder. The builder has 4 unskilled labourers employed on a contract guaranteeing them 40 hours per week at 6 per hour. They are currently idle and have spare time available to complete the job. 5. This is the estimated cost of hiring scaffolding. 6. The job will take 20 weeks and the machine will not be used on any other job if this job is not taken on. This represents the cost of the storage yard used by the builder. If this is not used it can be rented out to a competitor for the 20 week period at a rent of 500 per week. This is the cost of drawing up the plans for the project. These were drawn up several weeks ago. 9. A mark-up of 20% is added to all jobs. Required: (0) Briefly explain whether each item described above should be treated as relevant cost or not. (11 marks) (1) Using relevant costing principles, calculate the lowest price that the builder could quote for the building work. (14 marks)