Business services experience rapid growth as a result of worldwide automation, growing dem

Brick by Brick (BBB) is a building business that provides a range of building services to the public. Recently they have been asked to quote for garage conversions (GC) and extensions to properties (EX) and have found that they are winning fewer GC contracts than expected.

BBB has a policy to price all jobs at budgeted total cost plus 50%. Overheads are currently absorbed on a labour hour basis. BBB thinks that a switch to activity based costing (ABC) to absorb overheads would reduce the cost associated to GC and hence make them more competitive.

You are provided with the following data:

A typical GC costs $3,500 in materials and takes 300 labour hours to complete. A GC requires only one site visit by a supervisor and needs only one planning document to be raised. The typical EX costs $8,000 in materials and takes 500 hours to complete. An EX requires six site visits and fi ve planning documents. In all cases labour is paid $15 per hour.

Required:

(a) Calculate the cost and quoted price of a GC and of an EX using labour hours to absorb the overheads. (5 marks)

(b) Calculate the cost and the quoted price of a GC and of an EX using ABC to absorb the overheads. (5 marks)

(c) Assuming that the cost of a GC falls by nearly 7% and the price of an EX rises by about 2% as a result of the change to ABC, suggest possible pricing strategies for the two products that BBB sells and suggest two reasons other than high prices for the current poor sales of the GC. (6 marks)

(d) One BBB manager has suggested that only marginal cost should be included in budget cost calculations as this would avoid the need for arbitrary overhead allocations to products. Briefl y discuss this point of view and comment on the implication for the amount of mark-up that would be applied to budget costs when producing quotes for jobs. (4 marks)

A.payoff

B.pay

C.reduce

D.repayment

In order to be competitive in the tracking business, starts-ups need to ______.

A．cut down on the service fees

B．provide innovative services

C．relate their services to health care

D．develop their own GPS technology

A.post business opportunities

B.view buyer information

C.with a third-party certification body certification

Internet provides ______.

A．consumers with international business opportunities

B．subscribers with a cheap and efficient link

C．formal roles to oversee its users

D．telecommunications services to users

A、staff and headquarters

B、business activities and history

C、products and services

D、present development and reputation

()is the flow of intermediate goods and services from one business to another.

A. EDI

B. the supply chain

C. EC

D. TPN

A.7000 series routers

B.integrated services routers

C.small business pro routers

D.small business routers

A、ask for informaiton about services or products

B、want to request a job interviw

C、want to approach bank for loans

D、want to appy for business credit

A、autioner

B、government to business

C、broadcaster

D、banner ads