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Question: Multiplex Corporation has requested bids from several architects to design its new corporate headquarters. Friesen Architects is one of the firms bidding on the job. Friesen estimates that the job will require the following direct labor.
Friesen applies overhead to jobs at 160% of direct labor cost. Friesen would like to earn at least $80,000 profit on the architectural job. Based on past experience and market research, it estimates that the competition will bid between $325,000 and $400,000 for the job.
1. What is Friesen's estimated cost of the architectural job?
2. What bid would you suggest that Friesen submit?
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