Job costing, architectural design firm. Atlas Inc., an architectural design firm, is preparing to bid on two jobs — Brad Armstrong Enterprises and Judy Martin Associates. Both potential clients want a fixed-price quotation. Atlas's policy is to bid 120% of the budgeted to- tal costs for each job. The budgeted direct costs for each job are:

Brad Armstrong Judy Martin Direct Cost Categories Enterprises Associates Professional labor $ 36,000 $ 25,000 Staff labor 9,000 21,000 Fringe benefits on all direct labor 15,000 14,000 Photocopying 1,000 1,600 Phone/fax machine 400 800 Computer time 3,000 6,400 Budgeted indirect costs of each job are included in a single cost pool (general support) and allocated at the rate of 80% of budgeted total direct costs.

Required 1. Present an overview diagram of the Atlas job costing system.

2. Compute the budgeted total costs of the Armstrong and Martin jobs.

3. What price would Atlas quote on each job?

4. Atlas learns that the Ronald Simmons Group will also bid on the two jobs. Recently, Atlas pirated a Simmons employee, who states that Simmons bases its bids on professional labor costs multiplied by 470%. What price will Simmons bid on each job? (Assume that Simmons has the same cost structure as Atlas.)

5. Compare and comment on the two approaches to bidding on jobs.