Regarding Bid Pricing

question 236

Multiple Choice

Regarding bid pricing:

• A) the same overhead charges and profit rates should apply to all bids-to avoid legal problems.
• B) most firms should try to bid for as many jobs as possible-to spread risk.
• C) all business buyers are legally required to accept the lowest bid-if they ask for bids.
• D) the big problem for sellers is estimating all the costs-including the variable and fixed costs-that apply to a particular job.
• E) All of these alternatives are correct.

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Definitions:

Setup Times

The duration required to prepare or configure equipment or processes before starting a task or production.

Material Handling

Handling, protecting, storing, and controlling materials and merchandise through the phases of manufacturing, storage in warehouses, distribution to consumers, and their ultimate disposal.

Setup Cost

The expenses incurred to get equipment ready to process a different batch of goods.

Production Cycle

The series of steps involved in producing a good or service, from initial raw materials to the finished product.