5. Relevant Costs (2096) George Jettson builds custom homes in Cincinnati. Jettson was approached not too long ago by a client about a potential project, and he submitted a bid of $590,000, derived as follows: Land Construction materials Subcontractor labor costs S 90,000 120,000 150,000 S360,000 72,000 40,000 $472,000 Construction overhead: 20% of direct costs Allocated corporate overhead Total cost Jetson adds a 25% profit margin to all jobs, computed on the basis of total cost. In this client's case the profit margin amounted to SI 18,000 (S472.000 x 25%), producing a bid price of $590,000. Assume that 60% of construction overhead is fixed. Required: A. Suppose that business is presently very slow, and the client countered with an offer on this home of $455,000. Should Jettson accept the client's offer? Why? handle, how much should he be willing to accept for B. If Jettson has more business than he can the home? Why