Overland Company Is Involved in a Competitive Bidding Situation A)1
B)2
C)3
D)4
E)5

Multiple Choice

Overland Company is involved in a competitive bidding situation. Variable costs related to the project total $520,000, and allocated fixed cost is $95,000. Which of the following cost figures should be used in setting a minimum bid price if Overland has (1) excess capacity and (2) no excess capacity? $\begin{array} { | l | l | l | l | } \hline & \begin{array} { l } \underline {\text { Excess }} \\\underline {\text { Capacity }}\end{array} & & \begin{array} { l } \underline {\text { No Excess }} \\\underline {\text { Capacity }}\end{array} \\\hline 1 & \$ 0 & & \$ 0 \\\hline 2 & \$ 520,000 & & \$ 520,000 \\\hline 3 & \$ 520,000 & & \$ 615.000 \\\hline 4 & \$ 615,000 & & \$ 520,000 \\\hline 5 & \$ 615,000 & & \$ 615,000 \\\hline\end{array}$

A) 1
B) 2
C) 3
D) 4
E) 5