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What will be the revised quote

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Question

Fingers, a graphic design service has received an inquiry from a potential customer for a quotation for a web-page design. The pricing policy of the business is based on the budgeted financial data for the coming financial year. The data for the year is:

Sales - $550,000

Direct Materials - 50,000

Direct Labour - 300,000

Variable Overhead - 5,000

Advertising for business - 5,000

Depreciation On equipment - 30,000

Administrarion - 27000

Interest - 10,000

Profit before tax - 133,000

Other info: Management has budgeted for 20,000 direct labor hours. Overhead is applied based on direct layout costs. An estimate for direct costs of job shown below:

Direct Materials $400

Direct Labour (100hours) $1,500

Question:

Total budgeted direct costs for the year are:

Total budgeted indirect costs for the year are:

The budgeted overhead recovery rate based on direct labour hours is:

The recommended quote for the job is:

If the budgeted direct labour hours change to 25,000 hours what will be the revised quote ?

Reference no: EM132368971

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