Overland Shipping Company Is Involved in a Competitive Bidding Situation

Multiple Choice

Overland Shipping 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? $$\begin{array} { l l c } & \text { Excess Capacity } & \text { No Excess Capacity } \\\text { A. } & \$ 0 & \$ 0 \\\text { B. } & \$ 520,000 & \$ 520,000 \\\text { C. } & \$ 520,000 & \$ 615,000 \\\text { D. } & \$ 615,000 & \$ 520,000 \\\text { E. } & \$ 615,000 & \$ 615,000\end{array}$$

A) Choice A
B) Choice B
C) Choice C
D) Choice D
E) Choice E