GROUP PROJECT REQUIREMENT: Sammy Construction Company manufactures modular homes. The company has two main products that it sells commercially: a 1,000 square foot, one-bedroom model and a 1,500 square foot, two-bedroom model. The company recently began providing emergency housing (huts) to FEMA. The emergency housing is similar to the 1,000 square foot model. FEMA has requested Sammy to create a bid for 150 emergency huts to be sent for flood victims in the south. Your boss has asked that you prepare this bid. In preparing the bid, you find a recent invoice to FEMA for 200 huts provided after hurricane Katrina. You also have a standard cost sheet for the 1,000 square foot model sold commercially. Both are provided as follows: Standard cost sheet 1.000 sy. f. one-bedroom model Direct materials $ 8,000 Direct manufacturing labor 30 hours Manufacturing overhead" $3 per direct labor dollar 1.300 Total cost $10.400 Retail markup on total cost 20% Retail price $12 480 with production INVOICE: DATE: September 15, 2009 BILL TO: FEMA FOR: 200 Emerge my Hi SHIP TO: New Orleans Louisiana Direct materials $1,840.000 Direct manufacturing labor* 138,400 Manufacturing Overhead 415.200 Total cost 2.393.600 Government contract markup on total cost 15% Total due $2.752 640 1. Calculate the total bid if you base your calculations on the standard cost sheet assuming a cost plus 15% government contract. 2. Calculate the total bid if you base your calculations on the September 15, 2005, invoice assuming a cost plus 15% government contract. 3. What are the main discrepancies between the bids you calculated in #1 and #2? 4. What bid should you present to your boss? What principles from the IMA Standards of Ethical Conduct for Practitioners of Management Accounting and Financial Management should guide your decision