Table 10.1 has been expanded on the eResource to show which types of work Evergreen Construction Company (ECC) performed with more or less direct labor and which types of work were generally negotiated versus bid. ECC is considering adding an additional home office annual warehouse cost of $220,000 to support their direct work activities and adding a marketing cost of $130,000 to support their negotiated projects. Assume that in the short term, neither of these potential additions effect revenue, but they will increase HOOH and subsequently reduce net profits. Utilize ABC to apply these contemplated additional costs to the divisions which they support most and recalculate the net profits for each.
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