Question
Golden Generator Supply is approached by Mr. Stephen, a new customer, to fulfill a large oneminustimeminusonly special order for a product similar to one offered
Golden Generator Supply is approached by Mr. Stephen, a new customer, to fulfill a large
oneminustimeminusonly
special order for a product similar to one offered to regular customers. Golden Generator Supply has excess capacity. The following per unit data apply for sales to regular customers:
Direct materials | $ 230$230 | |
Direct manufacturing labor | 130130 | |
Variable manufacturing support | 280280 | |
Fixed manufacturing support | 120120 | |
Total manufacturing costs | 760760 | |
Markup (1010% of total manufacturing costs) | 7676 | |
Estimated selling price | $ 836$836 |
If Mr. Stephen wanted a
longminusterm
commitment, and not a
oneminustimeminusonly
special order, for supplying this product, calculate the most likely price to be quoted assuming the markup remains the same
A.
$ 640$640
B.
$ 836$836
C.
$ 760$760
D.
$ 360$360
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