X Ltd is found to be working below the normal capacity due to recession. The directors have been approached by another company with an enquiry for a special purpose job. The costing department estimated the following in respect of that job:
| Direct materials – Rs. 1,00,000. Don't use plagiarized sources. Get Your Custom Essay on you are required to advise the company on the minimum prices to be charged 608705 Get an essay WRITTEN FOR YOU, Plagiarism free, and by an EXPERT! Just from $10/Page | |
| Direct labour – 5000 hours @ Rs. 3 = 15,000. | |
| Overhead costs: Normal recovery rates: | |
| Variable = Re 1 per hour. | |
| Fixed = Rs. 1.50 per hour. | |
You are required to advise the company on the minimum prices to be charged.
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