Pieman Products Ltd makes road trailers to the precise specifications of individual customers.
The following are predicted to occur during the forthcoming year, which is about to start:
Direct materials cost ......................................£50,000
Direct labour cost .........................................£160,000
Direct labour time ............................................16,000 hours
Indirect labour cost ........................................£25,000
Depreciation of machine .................................£8,000
Rent ..................................................................£10,000
Heating, lighting and power ............................£5,000
Indirect materials .............................................£2,000
Other indirect cost (overhead) elements ......£1,000
Machine time ......................................................3,000 hours
All direct labour is paid at the same hourly rate.
A customer has asked the business to build a trailer for transporting a racing motorcycle to race meetings. It is estimated that this will require materials and components that will cost £1,000 It will take 250 direct labour hours to do the job, of which 50 will involve the use of machinery.

Required:
Deduce a logical cost for the job and explain the basis of dealing with overheads that you propose.