# Case Study Northwood Company

Satisfactory Essays
Case 7-1
1. Based on the tables and numbers given, the company may measure the outcome of the effect of accepting the Northwood job offer on their profit. The company can use Incremental profit/loss formula to measure the effect of accepting Northwood job to their profit.
From existing data, the calculation can be measure as following

Incremental revenue from Northwood project: \$75000

Total Wages = Partner wages + senior consultant wages + staff consultant wages
= (90 x \$250) + (125 x \$150 ) + (160 x \$80 )
= \$22500 + \$18750 + \$12800
= \$54050

20% Overhead Cost (variable cost) = 20% x \$8550 = \$1710 Incremental Cost = Total Wages + travel cost + 20% of overhead cost = \$54050 + \$18750 + \$12800 = \$76760

Incremental profit/loss =
accepts the job, the competitor will not happy because their will loss potential customer which is mean also decrease the competitors income.
- If Primus Inc. rejects the job, Competitors will happy because they can take the jobs to gain more income. Moreover, competitors may create good long-term relationship with Northwood Company that will give benefit for both company (Northwood and competitors).

b. Customer (Northwood company)
- If Primus Inc. accepts the jobs, customer will happy because their project will be done by primus with existing budget. Moreover Customers no need to seek other company to do their job. Moreover the primus also can build good long-term relationship with the Northwood. Having good long-term relationship with Northwood will increase the chance of getting another jobs from Northwood Inc.
- If Primus Inc. reject the jobs, the customer will unhappy because will increase their cost to research and seek other company that want to take over their job.
C. Manager / Management
- if Primus inc. accept the jobs, manager/management will feel unhappy because they will suffer loss of \$1760.
- If Primus inc reject the job, manager will happy because they will not loss any