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

question 19

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

• A)$2,128.
• B)$2,348.
• C)$2,208.
• D)$2,368.

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Definitions:

Birth

The process by which a baby is born, marking the end of pregnancy.

Low Birth Weight

A condition where a newborn weighs less than 2,500 grams (5 pounds, 8 ounces) at birth, often associated with preterm birth or poor fetal growth.

Oxygenation

The process of providing or adding oxygen to the body or a biological environment.

Neutral Thermal Environment

A condition in which the environment contributes to maintaining a body's core temperature without needing to increase metabolic heat production.