ECTION B (25 marks) 2. Claire has been asked to quote for a one-off contract. The following information is available: Materials: The contract requires 5,000kg of material Q, which is a material used regularly by the company in other production. The company has 3,000kg of material Q currently in stock which had been purchased last month for a total cost of 24,000. Since then the price per kilogram for material Q has increased by 8%. The contract also requires 400kg of material R. There are 500kg of material R in stock which are not required for normal production. This material originally cost a total of 5,525. If not used on this contract, the stock of material R would be sold for 16perkg. Labour: The contract requires 950 hours of skilled labour. Skilled labour is paid E9.50 per hour. There is a shortage of skilled labour and all the available skilled labour is fully employed in the company in the manufacture of product Z. The following information relates to product Z: Required: (a) Prepare on a relevant cost basis, the lowest cost estimate that could be used as the basis for a quotation. (14 marks) (b) Discuss three advantages and three disadvantages of full costplus pricing. (6marks) (c) Explain the price elasticity and the slope of the demand curve using a diagram