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

question 14

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 indirect costs for the year are:

• A)$117,000.
• B)$77,000.
• C)$72,000.
• D)$57,000.

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Definitions:

Muscular Contractions

The process of muscle fibers shortening and lengthening to produce movement or maintain posture.

Incisors

The front teeth in mammals, typically characterized by their sharp edges for cutting food.

Complex Carbohydrate

Carbohydrates consisting of long chains of monosaccharide units bound together, offering energy and fiber.

Sucrose

A disaccharide composed of glucose and fructose, commonly known as table sugar and used as a sweetener and preservative.