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Clayton Manufacturing is approached by a European customer to fulfill a one-time-only special order for a product similar to one offered to domestic customers. Clayton

Clayton Manufacturing is approached by a European customer to fulfill a one-time-only special order for a product similar to one offered to domestic customers. Clayton Manufacturing has a policy of adding a 20% markup to full costs and currently has excess capacity. The following per unit data apply for sales to regular customers:

Variable costs:

Direct materials $50

Direct labor 30

Manufacturing overhead 10

Marketing costs 20

Fixed costs:

Manufacturing overhead 110

Marketing costs 30

Total costs 250

Markup (20% of total costs) 50

Estimated selling price $300

If the European customer wanted a long-term commitment, and not a one-time-only special order, for supplying this product, calculate the most likely price to be quoted assuming the markup remains the same?

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