Regarding bid pricing:
A) the same overhead charges and profit rates should apply to all bids-to avoid legal problems.
B) most firms should try to bid for as many jobs as possible-to spread risk.
C) all business buyers are legally required to accept the lowest bid-if they ask for bids.
D) the big problem for sellers is estimating all the costs-including the variable and fixed costs-that apply to a particular job.
E) All of these alternatives are correct.

Question

Quizplus · Accepted Answer

The big problem for sellers in bid pricing is to estimate all the costs, including the variable and fixed costs, that are relevant to a particular job. While it may be true that the same overhead charges and profit rates should apply to all bids to avoid legal problems, and that most firms should try to bid for as many jobs as possible to spread risk, these are not the main concerns in bid pricing. It is also not true that all business buyers are legally required to accept the lowest bid if they ask for bids, as they may consider other factors such as quality, reliability, and reputation. Therefore, option D is the best choice as it correctly identifies the key challenge in bid pricing.

Regarding Bid Pricing