Brick by Brick (BBB) is a building business that provides a range of building services to the public. Recently they have been asked to quote for 500 product GC and 600 product EX. BBB has a policy to price all jobs at margin of 40%. Overheads are currently absorbed on a labour hour basis. BBB thinks that a switch to activity-based costing (ABC) to absorb overheads would reduce the cost associated to GC and hence make them more competitive. You are provided with the following data: Overhead Annual overheads $ Activity driver Total number of activities per year category Supervisors 90,000 Site visits 800 Planners 70,000 Planning documents 250 Property related 240,000 Labor hours 25,000 Quality control 30,000 Site visit 800 A typical GC costs $35 in materials and takes 4 labor hours to complete. 4 500 units of GC requires only two site visit by a supervisor and needs two planning document to be raised. A typical EX costs $80 in materials and takes 5 hours to complete. 600 product EX requires six site visits and 6 planning documents. In all cases labor is paid $18 per hour. Required: (a) Calculate the cost and quoted price of a GC and of an EX using labor hours to absorb the overheads. (5 marks) (b) Calculate the cost and the quoted price of a GC and of an EX using ABC to absorb the overheads. (15 marks) (c) Discuss difficulties if the entity using activity-based costing to determine quoted price