Question

All one question. please be clear where values go thanks!!

QUIZ Saved 1 c-1. What would be the contribution to profit for each of the three options? c-2. Do you agree with the EE's director? Complete this question by entering your answers in the tabs below. 1.95 points Reg A Reg B Reg C1 Reg C2 eBook Assume the prospective client gives three options. It is willing to accept either of EE's bids for the one-seminar or four-seminar activity levels, but the prospective client will pay only 85 percent of the bid price for the eight-seminar package. EE's director responds, "We can't make money in this business by shaving our bids! Let's take the four- seminar option because we make the most profit on it. C1. What would be the contribution to profit for each of the three options? (Round your answers to nearest whole dollar) Show less One Seminar Four Seminars Eight Seminars Bid Incremental costs Setup costs Material cost Differential labor costs Total incremental costs Contribution to profit $ 0$ 0$ 0 < Req8 Reg C2 > Mc Graw Hill Prey 1 of 10 Next >

Answer 1

a.) EE Bid for each of the three levels of activity :

	One seminar	Four Seminars	Eight Seminars
No. of participants	20	80	140
Setup Cost ($)	900	900	900
Material Cost (@ $100 per participant)	2,000	8,000	14,000
Differential Labor Cost	1,200	3,200	8,300
Allocated Fixed Cost (75% of direct labor cost)	900	2,400	6,225
Total Cost	5,000	14,500	29,425
Fees (20% of total cost)	1,000	2,900	5,885
Bid	6,000	17,400	35,310

b.)

	One seminar	Four Seminars	Eight Seminars
No. of participants	20	80	140
Differential Cost:
Setup Cost	900	900	900
Material Cost (@ $100 per participant)	2,000	8,000	14,000
Differential Labor Cost	1,200	3,200	8,300
Allocated Fixed Cost
Total Differential Cost	4,100	12,100	23,200
Differential Bid	6,000	17,400	35,310
Contribution Profit	1,900	5,300	12,110

c-1.)

	One seminar	Four Seminars	Eight Seminars
Bid	6,000	17,400	30,014 (35310*85%)
Incremantal Cost :
Setup Cost	900	900	900
Material Cost (@ $100 per participant)	2,000	8,000	14,000
Differential Labor Cost	1,200	3,200	8,300
Total Incremental Cost	4,100	12,100	23,200
Contribution Profit	1,900	5,300	6,814

c-2.) Disagree. Because the contribution profit is the greatest for eight seminars.

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