Question
Problem 6-24A Context-sensitive relevance LO 6-1. I don't understand I looked in a book solution, and the answer is different from the one that two
Problem 6-24A Context-sensitive relevance LO 6-1. I don't understand I looked in a book solution, and the answer is different from the one that two chegg experts gave me. I am confused? What is now correct answer. In the book solution for contribution job a and job b in in the first question, they have unit level materials, labor, overhead, and equipment cost substract from contract price. While chegg experts have add them all up. Can you please explain to me what do I need to do to get correct answer. Thank you
Bennett 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 Bennett 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 | Job A | Job B | ||||
Contract price | $ | 820,000 | $ | 694,000 | ||
Unit-level materials | 244,300 | 224,950 | ||||
Unit-level labor | 249,350 | 305,900 | ||||
Unit-level overhead | 19,800 | 13,100 | ||||
Supervisors salary | 115,870 | 115,870 | ||||
Rental equipment costs | 26,500 | 28,900 | ||||
Depreciation on tools (zero market value) | 20,500 | 20,500 | ||||
Allocated portion of companywide facility-sustaining costs | 11,600 | 10,300 | ||||
Insurance cost for job | 16,900 | 16,900 | ||||
Required: |
a-1. | Calculate the contribution to profit from Job A and Job B. (Negative amounts should be indicated by a minus sign.) |
a-2. | Assume that Bennett has decided to accept one of the two jobs. Recommend which job to accept? | ||||
|
b-1. | Assume that Job A is no longer available. Bennett choice is to accept or reject Job B alone. Calculate the contribution to profit from Job B. (Negative amount should be indicated by a minus sign |
b-2. | Based on your answer to requirement b-1, recommend whether to accept or reject Job B. | ||||
|
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started