If a Company Has Excess Capacity, Which of the Following

question 11

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 towards the company's cost and profit.
• C)Base the bid solely on direct labour hours.
• D)Downplay the potential impact of competitors.
• E)Allocate common fixed costs to individual jobs before preparing the bid.

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Definitions:

Sanctioned Ends

Officially approved or recognized goals or outcomes that are considered appropriate or desirable within a given context.

Sanctioned Means

Approved or accepted methods and procedures for achieving goals within a societal or organizational context.

Political Network

The web of relationships among individuals in an organization that are used to gain influence, share information, and achieve objectives through political means.

Highly Substitutable

Referring to goods or services that can be easily replaced or exchanged with others of similar value or function.