_________________________________________________________Question 1 Shreshtha Enterprises manufactures Caravans. The companyhas two main Caravans it sells commercially: a Deluxe 50-seaterCaravan and a Standard 24-seater Caravan. The Company has alsostarted manufacturing an Economy 10-seater Caravan to KhadkaTraders, recently. The Economy Caravan is similar to the DeluxeCaravan. Khadka has requested Shrestha to create a bid for 150Economy Caravans. You have been requested by your manager toprepare this bid. In preparing the bid, you find the following twodocuments: ï· A standard cost sheet for the Deluxe Caravans soldcommercially. ï· A recent invoice to Khadka for 200 Economy CaravansThe details fo these documents are given below. Term 3 ASSIGNMENT2, 2016 Foundations of Management Accounting â ACCT20076 Page 2 of2 Standard Cost Sheet: Deluxe Caravans Direct materials $9500Direct manufacturing labour 32 hours 704 Manufacturing overhead*$3.50 per direct labour dollar 2,464 Total cost $12,668 Retailmarkup on total cost 25% Retail price $15,835 Invoice Date:November, 1, 2015 Bill to: Khadka For: 200 Economy Caravans Directmaterials $2.090,000 Direct manufacturing labour** 164,400Manufacturing overhead 575,400 Total cost 2,829,800 Markup on totalcost 20% Total due $3,395,760 a. Calculate the total bid if youbase your calculations on the standard cost sheet assuming a costplus 20% mark-up. (3.5 marks) b. Calculate the total if you baseyour calculations on the November 1, 2015 invoice assuming a costplus 20% mark-up. (3.5 marks) c. What are the main discrepanciesbetween the bids you calculated in requirements 1 and 2? (6 marks)d. What bid should you present to your manager? What principlesfrom the IMA â Standards of Ethical Conduct for Practitioners ofManagement Accounting and Financial Management,â as described inChapter 1, should guide your decision? As a manager what would youdo? (7 marks) *Overhead cost pool includes inspection labour ($15per hour), setup labour ($12 per hour), and other indirect costsassociated with production. ** Direct manufacturing labour includes30 production hours per unit, 4 inspection hours per unit, and 6setup hours per unit.