What is the relevant “cost” for Pat’s bid under each of the following
independent situations? Support your chosen cost basis.
Pat will work on the contract during hours that would otherwise not be
billable to other clients.
b. Pat will give up work for other clients to meet the time requirements under
the contract. No ill will would be generated as a result of accepting the
contract.
Pat believes that the contract would be the start of a long-term business
relationship that could take up most of Pat’s time. The initial bid would
have to be close to the amount charged on subsequent projects. While Pat
has the time now to take the project without giving up clients, eventually
Pat would have to give up some other clients.