Temp Housing Corp. manufactures modular homes for commercial customers and government agencies and has been providing...

Temp Housing Corp. manufactures modular homes for commercial customers and government agencies and has been providing emergency housing units to FEMA. FEMA has requested a bid for 120 emergency housing units to be sent out west for the wildfire victims. Your manager asked you to prepare the bid. While researching the bid, you found a invoice sent to FEMA for 200 units they purchased for hurricane victims. You also have the standard cost sheet for the model they are purchasing.

Standard cost sheet: emergency housing unit

Direct materials		$ 9,500
Direct labor	32 hours	704
Manufacturing Overhead	$3.50/direct labor hour	2,464
Total Cost		$12,668
Retail markup on total cost		25%
Retail price		$15,835

INVOICE

DATE: October 20, 2016

CUSTOMER: FEMA

QUANTITY: 200 Emergency Housing Units

SHIP TO: Sarasota, FL

Direct materials		$ 2,090,000
Direct labor		164,000
Manufacturing Overhead		575,400
Total Cost		$ 2,829,400
Government contract markup on total cost		20%
Total due		$ 3,395,760

Calculate the bid basing your calculations on the standard cost sheet amounts assuming a cost plus 20% government contract. (Show all calculations)
Calculate the total bid basing your calculations on the 2016 invoice assuming a cost plus 20% government contract. (Show all calculations)
Is there a difference between the two calculated bids? What do you think caused this difference?
What bid should you present to your manager? Explain your answer in detail. ( You may want to consult the IMA "Standards of Ethical Conduct for Practitioners of Management Accounting and Financial Management" in Chapter 1 to help guide your decision.)

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Expert Solution

ekkarill92 answered 9 months ago

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