QUESTION 2: CHAPTER 4 PART 1: STORM LTD The business incurs the following costs for the next financial year: Direct materials cost 300,000 Direct labour cost 594,000 Direct labour time 22,000 hours Rent 46,000 Indirect materials 43,000 Depreciation of equipment 41,000 Supervisors' salaries 106,000 Design time costs (overheads) 70,000 Other miscellaneous indirect cost elements (overheads) 24,000 Project 101: Loft Conversion The business has received an enquiry about a loft conversion. It is estimated that it will take 520 direct labour hours to complete. It will also require direct materials at 24,600. The policy of the business is to charge a mark-up of 40% on the cost of the job when charging customers. The business normally uses a direct labour hour basis of charging indirect cost (overheads) to individual jobs. Requirements: Calculate the full (absorption) cost of converting the loft and price to be charged to the customer. Provide all supporting workings in detail ( 3 marks). PART 2: SKY BAKERY LTD Sky Bakery Ltd manufactures identical pies in batches. During April period, it produced 1,500 batches in total. Each batch produced includes 300 pies. The total costs incurred in March were: Required: A. Calculate cost per batch and cost per pie (1 marks). B. If selling price is 4.5 per unit, calculate the total profit ( 1 mark)