Cardigan Ltd has three production departments X, Y and Z, and two service departments, Canteen and Store.

The following budgeted figures are available for the forthcoming period in ($000):

Allocated

Indirect Material X 15

Y 20

Z 20

Indirect Labour X 7

Y 8

Z 9

Heat and Light 42

Rent 36

Plant insurance 20

Building insurance 14

Maintenance 32

Personnel costs 45

The following information is also available:

X Y Z Canteen Stores

Labour rate per hour ($) 5 6 7

Machine Hours 10 000 12 000 10 000

Employees 40 30 50 20 10

Direct Labour Hours 4 000 4 000 5 000

Area ( sq metres) 7 500 8 000 6 500 3000 3 000

Plant valuation ($) 23 000 30 000 20 000 4 000 3 000

Material requisitions 700 600 400

In departments X and Y, overhead is absorbed using a machine hour rate, and in department Z using a direct labour hour rate.

Required:

1. Calculate the selling price for a quotation based on the following figures:

Material $165.24

Labour X 12 hours

Y 10 hours

Z 3 hours

Machine hours

X 10 hours

Y 7 hours

Z nil

The company is looking to make a profit of 20% of cost on this particular job. [7 marks]

(Total 25 marks)