If a Company Has Excess Capacity, Which of the Following

Multiple Choice

If a company has excess capacity, which of the following is a sensible bidding strategy?

A) Set a price to cover all costs.
B) Base the bid on the incremental costs incurred because the job will contribute toward the company's profit.
C) Base the bid solely on direct labor hours.
D) Downplay the potential impact of competitors.
E) Allocate common fixed costs to individual jobs before preparing the bid.