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need only correct one Margine 2014 - Dec [1] (a) Premiere Manutacturer Ltd. received an enquiry for 250,000 numbers of special type of machine parts.
need only correct one
Margine 2014 - Dec [1] (a) Premiere Manutacturer Ltd. received an enquiry for 250,000 numbers of special type of machine parts. Capacity of the company exists for manufacturing the parts, but a fixed investment of 95,000 and working capital to the extent of 35% of Sales value will be required to undertake the job. The cost estimates are as follows: Raw materials 40,000 kg at 3.00 per kg. Labour hours 12,000 of which 800 would be overtime payable at double the normal rate. Labour rate 3.00 per hour Factory overhead 2.50 per direct labour hour. Seiling and distribution overhead expenses 45,400 Material recovered at the end of operation will be 12,000 (estimated! The company expects a net return of 15% on capital employed. As a Management accountant of the Company, you are requested to prepare Cost and Price statement, indicating the price to be quoted by the Company to the Customer. (8 marks)Step by Step Solution
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