Use the Information Below to Answer the Following Questions Other Relevant Information: Management Has Budgeted for 20,000 Direct Labour

question 32

Multiple Choice

Use the information below to answer the following questions.
Fingers Ltd, a graphic design service, has received an inquiry from a potential customer for a quotation for a webpage design. The pricing policy of the business is based on the budgeted financial data for the coming financial year. The data for the coming year is shown below: $$\begin{array} { l r } \text { Sales } & \$ 550,000 \\\text { Direct materials } & 50,000 \\\text { Direct labour } & 300,000 \\\text { Variable overhead } & 5,000 \\\text { Advertising for business } & 5,000 \\\text { Depreciation on equipment } & 30,000 \\\text { Administration } & 27,000 \\\text { Interest } & 10,000 \\\text { Profit before tax } & 133,000\end{array}$$ Other relevant information: Management has budgeted for 20,000 direct labour hours. Overhead is applied based on direct labour hours. An estimate for the direct costs of the job to be quoted on is shown below: $$\begin{array} { l r } \text { Direct materials } & \$ 400 \\\text { Direct labour (100 hours) } & \$ 1,500\end{array}$$
-Refer to the table above. Total budgeted direct costs for the year are:

• A)$350,000.
• B)$340,000.
• C)$375,000.
• D)$300,000.

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Definitions:

Blood Seeps

The process of blood slowly leaking or oozing out.

Cicatrix

A scar that results from the healing of a wound or injury.

Scar

A mark left on the skin or within body tissue where a wound, burn, or sore has not healed completely and fibrous connective tissue has developed.

Decubitus

An ulcer that occurs on areas of the skin that are under pressure from lying in bed, sitting in a wheelchair, or wearing a cast for a prolonged period; also called pressure ulcers or bedsores.