Backwoods Incorporated manufactures rustic furniture. The cost accounting system estimates manufacturing costs to be $80 per table, consisting of 70% variable costs and 30% fixed costs. The company has surplus capacity available. It is Backwoods policy to add a 50% markup to full costs for only long-term orders.

Backwoods is invited to bid on an order to supply 100 rustic tables. Backwoods bid $5,600 on this one time only short term order.

A large hotel chain is currently expanding and invited Backwoods to bid on 100 tables long term. Backwoods lowest price per unit on this was $120 per unit.

What are the effects of the short-term versus the long-term horizon on the bid price in this response?