Fanning 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 Fanning 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. Furthermore, 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 Supervisor's salary Rental equipment costs Depreciation on tools (zero market value) Allocated portion of companywide facility-sustaining costs Insurance cost for job Complete this question by entering your answers in the tabs below. Contract price Unit-level materials Unit-level labor Unit-level overhead Decision Job A $ 803,000 245,200 249,250 19,100 115,870 25,300 21,800 Required a. Assume that Fanning 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. Fanning'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. Rental equipment costs Depreciation on tools (zero market value) Allocated portion of companywide facility-sustaining costs Supervisor's salary Insurance cost for job Contribution to profit (loss) Recommend whether to accept or reject job B? 12,000 16,600 Required A Required B Assume that Job A is no longer available. Fanning'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. Note: Amounts to be deducted should be indicated by a minus sign. < Required A Job B $ 689,000 224,650 306,000 14,200 115,870 Job B 27,900 21,800 10, 100 16,600 Required B >

Fanning 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 Fanning 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. Furthermore, 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 Supervisor's salary Rental equipment costs Depreciation on tools (zero market value) Allocated portion of companywide facility-sustaining costs Insurance cost for job Complete this question by entering your answers in the tabs below. Contract price Unit-level materials Unit-level labor Unit-level overhead Decision Job A $ 803,000 245,200 249,250 19,100 115,870 25,300 21,800 Required a. Assume that Fanning 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. Fanning'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. Rental equipment costs Depreciation on tools (zero market value) Allocated portion of companywide facility-sustaining costs Supervisor's salary Insurance cost for job Contribution to profit (loss) Recommend whether to accept or reject job B? 12,000 16,600 Required A Required B Assume that Job A is no longer available. Fanning'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. Note: Amounts to be deducted should be indicated by a minus sign. < Required A Job B $ 689,000 224,650 306,000 14,200 115,870 Job B 27,900 21,800 10, 100 16,600 Required B >

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter2: Building Blocks Of Managerial Accounting

Section: Chapter Questions

Problem 4EA: Hicks Contracting collects and analyzes cost data in order to track the cost of installing decks on...

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