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I have calculated the cost of the following question I don’t know how to calculate the quoted price. Can you please help.

Brick by Brick (BBB) is a business which provides a range of building services to the public. Recently they have been asked to quote for garage conversions (GC) and extensions to properties (EX) and have found that they are winning fewer GC contracts than expected.

BBB has a policy to price all jobs at budgeted total cost plus 50%. Overheads are currently absorbed on a labour hour basis, resulting in a budgeted total cost of $11000 for each GC and $20500 for each EX. Consequently, the products are priced at $16500 and $30750 respectively.

The company is considering moving to an activity based approach. You are provided with the following data:

OH category Annual OH
Supervisors $90,000
Planners $70,000
Property related $240,000

Activity driver Total no.of activities per year
Site visits 500
Planning documents 250
Labour hrs 40000

A typical GC costs $3500 in materials and takes 300 labour hrs to complete. A GC requires only one site visit by a supervisor and needs only one planning document to be raised. The typical EX costs $8000 in materials and takes 500 hrs to complete. An EX requires 6 site visits and 5 planning documents. In all cases, labour is paid $15 per hour.

Calculate the cost and the quoted price of a GC and an EX using activity based costing.

P.S. Sir, it is my humble request that you add the feature of sharing images on this site because it’s very difficult to type the whole question.