j21 P.13.4 The Philips Company Ltd produces gramophone records and has several different recording companies as clients. Since each order is separately identifiable, a job order accounting system is in use. Two departments are utilized, and the following overhead budget data at normal activity are available for the whole current year as well as the actual overhead cost for the first month January): Overhead budget for the current Actual overheads(January) Particulars year at normal level of activity Department X Fixed 37,20,000 66,000 Variable 6,00,000 63,000 Department Y Fixed 10,80,000 87.000 Variable 9,00.000 51.000 During January, 2 jobs were in production (209 and 210). The following is a summary of some of the data from their respective job cost sheets. Job 209 Job 210 Departments Departments Items Y Direct labour 21.08,000 15,000 136,000 342.000 Direct labour-hours 24,000 3.000 6,000 9,000 Machine hours 4.800 24,000 3,000 12,000 The estimates of the departments' direct-labour cost, direct labour-hours, and machine-hours at normal activity are also provided in the following table, along with a set of correlation coefficients between over- heads and the various measure of activity that have been compiled from past production and cost data. Y Department Department Y Normal Correlation co-efficient Normal lovel Correlation coefficient level of activity with overheads of activity with overheads Direct labour cost 15,00,000 0.8 37,20,000 0.6 Direct labour-hours 30,000 0.9 15,000 0.8 Machine-hours 9,000 0.5 6,000 0.9 During January, the company received an invitation from a regular customer to bid on a job which, if won, would be executed in February. The job was estimated to require 81.50,000 of materials and to involve: Department X Department y Direct labour cost 75.000 33,000 Direct labour-hours 1,500 600 Machine-hours 300 210 How much overhead would you include in the bid? Estimate the bid price, the company should quote, assuming the company's normal practice of charging 20 per cent on cost price as profit