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413 2018 - June [8] (d) PQR Ltd. has received an enquiry for supply of 2,50,000 special type of machine parts. Capacity exists for manufacture of the machine parts but a fixed investment of 1,20,000 and working capital to the extent of 25% of sales value will be required to undertake the job. The cost estimated is as follows: Raw Materials -25000 kgs at 3.00 per kg Labour Hours -10000 hrs, of which 1500 would be overtime hours payable at double the labour rate. Labour Rate - 3 per hour Factory overheads -3.50 per direct labour hour Selling and Distribution overheads - * 32,000 Materials recovered at the end of the operation will be $10,000 (estimated) The company expects a net return of 25% on capital employed. You are the Management Accountant of the company. The Managing Director requests you to prepare a cost and price statement, indicating the price which should be quoted to the customer. (4 marks