Under competitive bidding when a company has no excess capacity, the bid price would normally include:

Question

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When a company has no excess capacity, the bid price must cover the full cost of the job, including capacity-producing costs. This is because the company must allocate a portion of its fixed costs to each job to ensure that it is covering its overhead expenses. Ignoring these costs would result in a bid that does not cover the full cost of the job and ultimately leads to losses for the company.

Under Competitive Bidding When a Company Has No Excess Capacity