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Question 1. Calculate the full cost of the job for Husanti Industries using the current approach to allocating overhead. What would be the bid assuming it is 125% of production costs?
Question 2. To prevent jobs from being burdened with the "cost of excess capacity," suppose the company decides to allocate overhead using its practical capacity of 1,000,000 machine hours. How will this change the full cost of the job for Husanti Industries? What would be the bid assuming it is priced at 125% of this revised measure of production costs?
Question 3. Assume you have been assigned to assist Sally Jones. Prepare an analysis in support of a recommended bid on the Husanti Industries job Your analysis should contain calculations that Sally can use to support her argument for a lower bid (if you believe this is a good idea).
Question 4. What other factors would you consider before selecting a bid?
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