Exercise The following is known about the small construction company engaged in custom production: working hours available 3600 h/year fixed costs are estimated to be €30,000.00/year according to experience, variable overhead costs are 8% of the value of a working hour the company's management sets the company's profit target at €50,000.00/year The company receives a request for tender for a construction contract and determines the following information: Construction material for the contract €10,000.00 the cost of a working hour is €27.00/h the contract requires working hours of 100 h total work trips for the contract between the place of business and the construction site 200 km the mileage allowance charged to the customer is €0.70/km the rest of the 3,600 h annual capacity hours are used for other contracts to be sold a) Calculate the company's total margin and hourly margin Total margin Hourly rate b) Calculate the total price offer with value added tax for the construction contract based on the hourly margin principle. (24% tax)

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