Question 5 Costing and Pricing (5 marks) Heavenly Day Spa uses a costing system for all customers who have treatment at their day spa. The day spa uses a pre-determined indirect cost rate for allocating indirect costs to individual customer visits, allocating indirect costs at the rate of $22 per hour. Customer Jenny James will be in the Day Spa for two hours during September. The direct costs related to Jenny's two hour visit include: Direct Materials Cost of products used Direct Labour $12 Cost of Therapist $20/hour Other supplies $4 Required a) Calculate the full cost (direct costs + indirect costs) of Jenny James' two hour visit. (4 marks) b) Assume the Day Spa applies a cost-based pricing model to set prices to customers, adding a mark-up of 30%. What price should Heavenly Day Spa charge Jenny James for her visit. (1 mark) *Students please remember to show all workings to maximise your mark