Vernon 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 Vernon 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.

Required

1. Assume that Vernon 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.

2. Assume that Job A is no longer available. Vernon'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.

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 Job A $819,000 245,600 250, 250 18,800 115,970 26,300 20,300 12,000 16,600 Job B $750,000 214,950 306,800 13,300 115,970 28,900 20,300 9,500 16,600 Required A Required B Assume that Vernon 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. (Negative amounts should be indicated by a minus sign.) 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 Required A Required B Assume that Job A is no longer available. Vernon'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. (Negative amounts should be indicated by a minus sign.) 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 whether to accept or reject Job B