Mission roofing managerial accounting-excess capacity

Assignment Help Managerial Accounting

Reference no: EM1348978

Mission Roofing performs roofing services for commercial clients. The company recently submitted a bid of $371,000 to the Shawnee School System, computed as follows:

Mission adds a 20% profit margin to all jobs, computed on the basis of total direct cost. In Shawnee's case the profit margin amounted to $50,000 ($250,000 20%), producing a bid price of $371,000. Assume that 60% of construction overhead is fixed.

Required:

A. If Mission had excess capacity, what would be the lowest cost total that the company should use when figuring its bid for the district? How can Mission justify this amount?

B. If Mission had no excess capacity, what would be the lowest price that the company should charge?

C. What is the primary benefit and problem of approaching a competitive bid situation with a low-bid philosophy?

Reference no: EM1348978

Questions Cloud

What is the slit width : What is the angular momentum of a 3.2 kg uniform cylindrical grinding wheel of radius 12cm while rotating at 1400 rpm.

Explain every firm is faced with the law of diminishing : Explain Every firm (and every individual and nation as well) is faced with the law of diminishing marginal returns

Impact of healthy organizational change : Prepare an annotated bibliography in APA format of three to four research studies discussing the impact of healthy organizational change on employee motivation.

Personality theories-a comparison : Discuss analytic, social, trait, biological, behavioral and learning, cognitive social learning, humanistic, and attachment.

Mission roofing managerial accounting-excess capacity : Mission Roofing performs roofing services for commercial clients. The company recently submitted a bid of $371,000 to the Shawnee School System, computed as follows:

Discuss financial ratios and investment analysis : Describe how external stakeholders use financial data such as company income statements and balance sheets to make decisions about the company in such cases as advancing credit or offering leasing vehicles.

Organizational change in publicly traded companies : The one page write up should include a brief synopsis of the information found about the changes and why you think it's interesting

What is the total work done on the block by the force : A 7 kg bowling ball moves at 2.15 m/s. How fast should a 2.40 g Ping-Pong ball move so that the two balls have the same kinetic energy.

Explaining the approaches to acknowledge packets : In second strategy, packets are not acknowledged individually, but the whole file is acknowledged when it arrives. Explain the two approaches.

User Account

All Pages