Question
Clean, Inc. cleans and waxes floors for commercial customers. The company is presently operating at less than capacity, with equipment and employees idle at times.
Clean, Inc. cleans and waxes floors for commercial customers. The company is presently operating at less than capacity, with equipment and employees idle at times. The company recently received an order from a potential customer outside the company's normal geographic service region for a price of $29,000. The size of the proposed job is 42,000 square feet. The company's normal service costs are as follows:
Unit-level materials | $ | 0.38 | per square foot |
Unit-level labor | $ | 0.45 | per square foot |
Unit-level variable overhead | $ | 0.28 | per square foot |
Facility-level overhead | Allocated at $0.30 per square foot | ||
If the company accepts the special offer:
Multiple Choice
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The company will lose $17,620 on the job.
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The company will lose $5,860 on the job.
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The company will lose $30,220 on the job.
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The company will earn $13,040 on the job.
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