nutt ltd produces clothing for the retail trade a small retail store lsquo fashion c 611280
Nutt Ltd produces clothing for the retail trade. A small retail store, ‘Fashion Craze’, has approached Nutt Ltd for a quotation to supply them with a bulk order for 50 pairs of leather trousers. The following information is estimated:
|
Materials |
£10 per pair |
|
Direct labour: |
|
|
Cutting |
£6 per hour |
|
Sewing |
£8 per hour |
|
Processing |
£5 per hour |
Each pair of trousers will require 1 hour of cutting, 2 hours of sewing and 30 minutes of processing. Overheads are apportioned on the basis of £10 per pair of trousers completed. A mark-up of 40% is added for profits. A batch of 50 pairs of trousers would be priced as follows:
Batch cost: 50 pairs of leather trousers
|
£ |
||
|
Materials |
50 x £10 |
500 |
|
Direct labour: |
||
|
Cutting |
50 x £6 x 1 hour |
300 |
|
Sewing |
50 x £8 x 2 hours |
800 |
|
Processing |
50 x £5 x 0.5 hour |
125 |
|
Overheads |
50 x £10 |
500 |
|
2,225 |
||
|
Mark-up (40%) |
890 |
|
|
Price to be quoted |
3,115 |