A company received an enquiry for the supply of 10,000 steel folding chairs. The costs are estimated as follows:
|
Raw materials |
1,00,000 kg at Re 1 per kg |
|
Direct wages |
10,000 hours at Rs 4 per hour |
|
Variable overheads: |
|
|
Factory |
Rs 2.40 per labour hour |
|
Selling and distribution |
Rs 16,000 |
|
Fixed overheads: |
|
|
Factory |
Rs 6,000 |
|
Selling and distribution |
Rs 14,000 |
Prepare a statement showing the price to be fixed that will result in a profit of 20% on the selling price.