Price to be quoted

30,875

Problem 1.5

The accounts of a machine manufacturing company disclose the following information for the six

months ending 31st Dec., 2013.

Materials used

Direct wages

Factory overhead expenses Office expenses

1,50,000

1,20,000

24,000

17,640

Prepare a Cost Sheet of the machines and calculate the price which the company should quote for the manufacture of a machine requiring materials valued at 1,250 and expenditure on productive wages of 750, so that the price may yield a profit of 20% on the selling price.

For the purpose of price quotation, charge factory

overhead as a percentage of direct wages and

charge office overhead as a percentage of works cost. (8.B.M. Bangalore; B. Com.. Madurai Kamraj)