Ken Owens Construction specializes in small additions and repairs. His normal charge is $500/day plus materials. Due to his physical condition, David, an elderly gentleman, needs a downstairs room converted to a bathroom. Ken has produced a bid for $5,000 to complete the bathroom. He did not provide David with the details of the bid. However, they are shown here. Ken’s Bid Detail Dollars Direct Material $2,200 Direct Labor 1,700 Variable overhead 100 Fixed overhead 500 Profit 500 $5,000 A. The town’s social services has asked Ken if he could reduce his bid to $4,000. Should Ken accept the counter offer? Current Bid New Bid Direct Material $2,200 $2,200 Direct Labor 1,700 1,700 Variable overhead 100 100 Fixed overhead 500 Profit 500 $5,000 $4,000 B. How much would his income be reduced? $????
Ken Owens Construction specializes in small additions and repairs. His normal charge is $500/day plus materials. Due to his physical condition, David, an elderly gentleman, needs a downstairs room converted to a bathroom. Ken has produced a bid for $5,000 to complete the bathroom. He did not provide David with the details of the bid. However, they are shown here. Ken’s Bid Detail Dollars Direct Material $2,200 Direct Labor 1,700 Variable overhead 100 Fixed overhead 500 Profit 500 $5,000 A. The town’s social services has asked Ken if he could reduce his bid to $4,000. Should Ken accept the counter offer? Current Bid New Bid Direct Material $2,200 $2,200 Direct Labor 1,700 1,700 Variable overhead 100 100 Fixed overhead 500 Profit 500 $5,000 $4,000 B. How much would his income be reduced? $????
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Question
Ken Owens Construction specializes in small additions and repairs. His normal charge is $500/day plus materials. Due to his physical condition, David, an elderly gentleman, needs a downstairs room converted to a bathroom. Ken has produced a bid for $5,000 to complete the bathroom. He did not provide David with the details of the bid. However, they are shown here.
| Ken’s Bid Detail Dollars | |
| Direct Material | $2,200 |
| Direct Labor | 1,700 |
| Variable overhead | 100 |
| Fixed overhead | 500 |
| Profit | 500 |
| $5,000 |
A. The town’s social services has asked Ken if he could reduce his bid to $4,000. Should Ken accept the counter offer?
| Current Bid | New Bid | |
| Direct Material | $2,200 | $2,200 |
| Direct Labor | 1,700 | 1,700 |
| Variable overhead | 100 | 100 |
| Fixed overhead | 500 | |
| Profit | 500 | |
| $5,000 | $4,000 |
B. How much would his income be reduced?
$????
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