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

question 37

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 recommended quote for the job is:

• A)$2,285.
• B)$2,460.
• C)$2,195.
• D)$2,485.

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Definitions:

Annual Dividend

The total amount of dividend that a company pays to its shareholders in a year.

Rate of Return

A financial metric expressing the percentage of profit or loss on an investment over a specific period, serving as a key indicator of investment efficiency.

Dividends Reduction

A decrease in the amount of dividends distributed to shareholders, often indicating a change in the company's profit distribution policy or financial health.

Rate of Return

A measure of the profit or loss of an investment over a specified period, expressed as a percentage of the investment's initial cost.