Dave and his two brothers, Martin and Shawn, go to college during the week and run a

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Dave and his two brothers, Martin and Shawn, go to college during the week and run a "3-Man Moving Company" on the weekends. They rent a truck from a local U-Haul store when needed and help people move their belongings to new locations. The brothers charge $125 per hour for their services (this includes the truck rental).
Required:
a. The three brothers do not have any jobs in hand for the upcoming weekend. But just then the telephone rings, and a potential customer offers $100 per hour for an eight hour job to be completed by the end of Saturday. Are Dave and his brothers dealing with an excess supply or excess demand situation? Should they accept the job, or should they demand a rate of $125 per hour?
b. Referring to part (a) above, moments later the telephone rings again and a second customer offers $125 per hour for a five hour job also to be completed the same day. Dave and his brothers realize that they can take only one of the two jobs. Are Dave and his brothers dealing with an excess supply or excess demand situation? Assuming that the first customer is firm with respect to his offer of $100 per hour, which job should they accept?
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Managerial Accounting

ISBN: 978-1118385388

2nd edition

Authors: Ramji Balakrishnan, Konduru Sivaramakrishnan, Geoff B. Sprinkle

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