Question 2 Black and White (B\&W) is a building business that provides a range of building services to the public. Recently they have been asked to quote for garage conversions (GC) and extensions to properties (EX) and have found that they are winning fewer GC contracts than expected. B\&W has a policy to price all jobs at budgeted total cost plus 52%. Overheads are currently absorbed on a labour hour basis. B\&W thinks that a switch to activity based costing (ABC) to absorb overheads would reduce the cost associated to GC and hence make them more competitive. A typical GC costs RO 7,000 in materials and takes 600 labour hours to complete. A GC requires only one site visit by a supervisor and needs only one planning document to be raised. The typical EX costs RO 16,000 in materials and takes 1000 hours to complete. An EX requires six site visits and five planning documents. In all cases labour is paid RO 30 per hour. Required with appropriate formulas: (a) Calculate the cost and quoted price of a GC and of an EX using laboux hours to absorb the overheads. (b) Calculate the cost and the quoted price of a GC and of an EX using ABC to absorb the overheads. Give your comments