102B-Case1-FA20-hints(1).pdf - Departmental MOH applied provides more accuracy because the allocation base tends to be more specific to each department

102B-Case1-FA20-hints(1).pdf - Departmental MOH applied...

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Unformatted text preview: Departmental MOH applied provides more accuracy because the allocation base tends to be more specific to each department than plant wide, which provides a rough estimate of allocation base for the plant as a whole. In this case, it leads to MOH department to be lower than that of plantwide MOH applied. MOH applied for plantwide is higher than that of departmental; therefore considering they bid on the profitability, plantwise offers a less promising profitability outlook due to higher cost. Thus, the company will place a lower bid amount since the business is less attractive with lower profitability. Thus they are less likely to win the job. ...
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