. Cost Analysis and Pricing. Sales in the Jackson office of Fast Print Company for 1998 were \(\$ 475,000\). Costs were:

For most printing jobs, a cost-plus pricing policy is used. To find a job's cost, estimated labor costs are doubled to cover labor and overhead and then added to estimated materials costs. The total job costs are then multiplied by 120 percent to calculate customer price.
The advertising manager for a regional supermarket has proposed a deal. She has a weekly advertising piece which will be mailed to local residents. The printing job would require \(\$ 200\) of materials and supplies and \(\$ 100\) of direct labor time. She is willing to pay \(\$ 420\) per week and would like a one-year contract. The Jackson office manager rejects the offer since it violates his pricing strategy.
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1. Would the supermarket business be profitable for Fast Print:

(a) On a one-time basis?

(b) On a regular (annual) basis?
2. What qualitative issues might impact your answer?

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Materials and variable supplies expenses. Direct labor expenses .... Occupancy and other fixed operating expenses. Total expenses. $200,000 100,000 100,000 $400,000