Orion Limited had total overheads for a month of 24,000. The total monthly budgeted labour hours were 1,200 and the total budgeted material usage was 1,600 kg. During the month the company gives a quotation for a job which requires 60 kg of materials at 7.50 per kg and 12 direct labour hours at 25 per hour. Overheads are recovered on the basis of direct labour hours. The profit is 25% based on selling price.

(i) if the actual direct labour hours worked on the job were 15, what would be the new profit, assuming that the quoted selling price could not be renegotiated? (4 marks)

(ii) if overheads were instead recovered based on material usage rather than labour hours, would that have changed your answer to part (i) above, if so what would be the new profit? (3 marks)

(c) Managing costs is very important given the competitive environment in which modern businesses operate . Discuss this statement including in your discussion some of the recent approaches to costing which have emerged to help businesses manage their costs (maximum 600 words). (25 marks)