A construction company specializes in pouring foundations for housing units. It also has a division performing masonry work. In the last several years masonry work has become unprofitable because of a recession. The head of the masonry unit says:
1. We need to bid low for jobs in order to keep a cadre of skilled masons. When the recession ends, we will not have the capability of getting back into doing skilled
masonry work if we don’t have a viable group of masons. If necessary, we should accept modest losses on the job and not cover direct costs.
2. We should be evaluated as a service unit. We do work for the construction company clients keeping other construction companies out of our market area.

Evaluate the masonry managers claims. Is the masonry department a service department? Should the company continue to keep a masonry unit if it is not turning a profit?

Answer rating: 100% (QA)

The masonry department is not a service department The company should consider shutting down its masonry department as it does not provide profit at a... View the full answer