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Essay Details:
Essay text:
Primus is considering accepting the job because it has capacity (i.e. available staff) to take on the new contract with out having to hire any new employees.
Issues
Primus has to determine if engaging in a project, that is estimated to create a net loss of $9,000, is a good decision. What will be the overall effect to P/L to Primus if they accept the contract? Analyzing Primus' cost structure, what can be considered to help justify our decision of accepting verses rejecting the offer?
Analysis
If we analyze Primus's cost structure (Exhibit 1) we can determine that Primus would have travel costs of $15,000...
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