If a Company Has Excess Capacity, Which of the Following

question 19

Multiple Choice

If a company has excess capacity, which of the following is a sensible bidding strategy?

• A) Set a price to cover all costs.
• B) Base the bid on the incremental costs incurred because the job will contribute toward the company's profit.
• C) Base the bid solely on direct labor hours.
• D) Downplay the potential impact of competitors.
• E) Allocate common fixed costs to individual jobs before preparing the bid.

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