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

question 15

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

• A)$3.85 per DLH.
• B)$5.60 per DLH.
• C)$2.85 per DLH.
• D)$5.85 per DLH.

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Definitions:

Poverty

A state or condition in which an individual or community lacks the financial resources and essentials for a minimum standard of living.

Federal Government

The national government of a federal state, which holds the authority to govern matters that affect the entire country, separate from state or local governments.

American People

The populace of the United States, consisting of individuals from diverse ethnic, cultural, and religious backgrounds.

Mexican Immigration

The movement of people from Mexico to other countries, particularly the United States, for various reasons including work and family reunification.