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enrique_sanchez enrique_sanchez
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5 years ago
Zolas' Heaters is approached by Ms. Leila, a new customer, to fulfill a large one-time-only special order for a product similar to one offered to regular customers. Zolas' Heaters has excess capacity. The following per unit data apply for sales to regular customers:

Direct materials$400
Direct manufacturing labor120
Variable manufacturing support60
Fixed manufacturing support200
Total manufacturing costs780
Markup (20% of total manufacturing costs)156
Estimated selling price$936

If Ms. Leila wanted a long-term commitment, and not a one-time-special order, for supplying this product, calculate the most likely price to be quoted assuming the markup remains same?
A) $780
B) $580
C) $520
D) $936
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LunarShotzLunarShotz
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#1
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5 years ago
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#2
5 years ago
Makes more sense now, TY
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