Perez 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 Perez 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. Furthermbre, 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 Job A Job B $818,000 244,000 249,650 18,800 114,870 26,800 20,200 12,300 16,300 $682,000 224,850 306,400 14,000 Supervisor's salary Rental equipment costs Depreciation on tools (zero market value) Allocated portion of company-wide facility-sustaining costs Insurance cost for job 114,870 27,900 20,200 10,600 16,300 Required a. Assume that Perez 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. Perez'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. Complete this question by entering your answers in the tabs below. Required A Required B Assume that Perez has decided to accept one of the two jobs. Fill in the 'information relevant to selecting one job versus the other. (Negative amounts should be indicated by a minus sign.) a. Assume that Perez has decided to accept one or me twojo Recommend which job to accept. b. Assume that Job A is no longer available. Perez's choice is to accept or reject Job B alone. Fill in the information relevar decision. Recommend whether to accept or reject Job B. Complete this question by entering your answers in the tabs below. Required A Required B Assume that Perez has decided to accept one of the two jobs. Fill in the information relevant to selecting one job versus the. other. (Negative amounts should be indicated by a minus sign.) Decision Job A Job B Contract price $ 818,000 $ 682,000 (244,000) (249,650) (18,800) Unit-level materials (224,850) Unit-level labor (306,400) (14,000) Unit-level overhead Supervisor's salary Rental equipment costs (26,800) (27,900) Depreciation on tools (zero market value) Allocated portion of companywide facility-sustaining costs Insurance cost for job Contribution to profit (loss) $ 278,750 $ 108,850 Recommend which job to accept? Job A

Perez 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 Perez 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. Furthermbre, 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 Job A Job B $818,000 244,000 249,650 18,800 114,870 26,800 20,200 12,300 16,300 $682,000 224,850 306,400 14,000 Supervisor's salary Rental equipment costs Depreciation on tools (zero market value) Allocated portion of company-wide facility-sustaining costs Insurance cost for job 114,870 27,900 20,200 10,600 16,300 Required a. Assume that Perez 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. Perez'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. Complete this question by entering your answers in the tabs below. Required A Required B Assume that Perez has decided to accept one of the two jobs. Fill in the 'information relevant to selecting one job versus the other. (Negative amounts should be indicated by a minus sign.) a. Assume that Perez has decided to accept one or me twojo Recommend which job to accept. b. Assume that Job A is no longer available. Perez's choice is to accept or reject Job B alone. Fill in the information relevar decision. Recommend whether to accept or reject Job B. Complete this question by entering your answers in the tabs below. Required A Required B Assume that Perez has decided to accept one of the two jobs. Fill in the information relevant to selecting one job versus the. other. (Negative amounts should be indicated by a minus sign.) Decision Job A Job B Contract price $ 818,000 $ 682,000 (244,000) (249,650) (18,800) Unit-level materials (224,850) Unit-level labor (306,400) (14,000) Unit-level overhead Supervisor's salary Rental equipment costs (26,800) (27,900) Depreciation on tools (zero market value) Allocated portion of companywide facility-sustaining costs Insurance cost for job Contribution to profit (loss) $ 278,750 $ 108,850 Recommend which job to accept? Job A

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter2: Building Blocks Of Managerial Accounting

Section: Chapter Questions

Problem 4EA: Hicks Contracting collects and analyzes cost data in order to track the cost of installing decks on...

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