A Co recently received an order from a potential customer outside the Co. normal geographic service region for a price of $9,000. The size of the proposed job is 22,000 square feet. The Co. normal service costs are as follows:
Unit level materials $0.18 per square foot
Unit Level Labor $0.25 per square foot
Unit Level variable overhead $0.08 per square foot
Facility level overhead Allocated at $0.10 per square foot
If the Co. accepts this offer: a) will the Co $4,420 on the job; b) Lose 2,220 on the job c) lose $460 on the job d) Earn $5,040. Not sure how to set up the formula to get the correct answer.
Total relevant cost= (Unit level materials + Unit Level Labor + ...
Solution describes how to to calculate profit or loss on the job under job costing.