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

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
Question
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.)
Transcribed Image Text: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
Transcribed Image Text: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
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 3 steps

Blurred answer
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education