Continent Construction Company is a building contractor specializing in small commercial buildings. The company has the opportunity to accept one of two jobs; it cannot accept both because they must be performed at the same time and Continent does not have the necessary labor force for both jobs. Indeed, it will be necessary to hire a new supervisor if either job is accepted. Furthermore, additional insurance will be required if either job is accepted. The revenue and costs associated with each job follow: Cost Category Contract price Unit-level materials Unit-level labor Unit-level overhead Supervisor's salary Rental equipment costs Depreciation on tools (zero market value) Allocated portion of companywide facility-sustaining costs Insurance cost for job $810,000 251,000 262,000 41,000 71,000 26,500 20,400 10,500 18,400 Job B $760,000 221,000 312,000 31,000 71,000 29,500 20,400 8,700 18,400 Required a. Assume that Continent has decided to accept one of the two jobs. Fill in the information relevant to selecting one job versus the other. Recommend which job to accept. b. Assume that Job A is no longer available. Continent's choice is to accept or reject Job B alone. Fill in the information relevant to this decision. Recommend whether to accept or reject Job B. Job A Job B Decision Contract price Unit-level materials Unit-level labor Unit-level overhead Supervisor's salary Rental equipment costs Depreciation on tools (zero market value) Allocated portion of companywide facility-sustaining costs Insurance cost for job Contribution to profit (loss) Recommend which job to accept? $ 0 $ 0 Decision Job B Contract price Unit-level materials Unit-level labor Unit-level overhead Rental equipment costs Depreciation on tools (zero market value) Allocated portion of companywide facility-sustaining costs Supervisor's salary Insurance cost for job Contribution to profit (loss) Recommend whether to accept or reject job B? Continent Construction Company is a building contractor specializing in small commercial buildings. The company has the opportunity to accept one of two jobs; it cannot accept both because they must be performed at the same time and Continent does not have the necessary labor force for both jobs. Indeed, it will be necessary to hire a new supervisor if either job is accepted. Furthermore, additional insurance will be required if either job is accepted. The revenue and costs associated with each job follow: Cost Category Contract price Unit-level materials Unit-level labor Unit-level overhead Supervisor's salary Rental equipment costs Depreciation on tools (zero market value) Allocated portion of companywide facility-sustaining costs Insurance cost for job $810,000 251,000 262,000 41,000 71,000 26,500 20,400 10,500 18,400 Job B $760,000 221,000 312,000 31,000 71,000 29,500 20,400 8,700 18,400 Required a. Assume that Continent has decided to accept one of the two jobs. Fill in the information relevant to selecting one job versus the other. Recommend which job to accept. b. Assume that Job A is no longer available. Continent's choice is to accept or reject Job B alone. Fill in the information relevant to this decision. Recommend whether to accept or reject Job B. Job A Job B Decision Contract price Unit-level materials Unit-level labor Unit-level overhead Supervisor's salary Rental equipment costs Depreciation on tools (zero market value) Allocated portion of companywide facility-sustaining costs Insurance cost for job Contribution to profit (loss) Recommend which job to accept? $ 0 $ 0 Decision Job B Contract price Unit-level materials Unit-level labor Unit-level overhead Rental equipment costs Depreciation on tools (zero market value) Allocated portion of companywide facility-sustaining costs Supervisor's salary Insurance cost for job Contribution to profit (loss) Recommend whether to accept or reject job B
