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Rooney Construction Company is a building contractor specializing in small commercial buildings. The company has the opportunity to accept one of two jobs; it cannot
Rooney 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 Rooney 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 $ 804,000 $ 746,000 Unit-level materials 245,100 214,050 Unit-level labor 249,550 305,900 Unit-level overhead 19,900 14,600 Supervisors salary 115,270 115,270 Rental
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