Question
Quick Connect manufactures high-tech cell phones. Quick Connect has a policy of adding a 15% markup to full costs and currently has excess capacity. The
Quick Connect manufactures high-tech cell phones. Quick Connect has a policy of adding a 15% markup to full costs and currently has excess capacity. The following information pertains to the company's normal operations per month:
Output units 1,500 phones
Machine-hours 1,100 hours
Direct manufacturing labor-hours 1,200 hours
Direct materials per unit $24
Direct manufacturing labor per hour $9
Variable manufacturing overhead costs $213,000
Fixed manufacturing overhead costs $127,000
Product and process design costs $143,700
Marketing and distribution costs $154,345
For long-run pricing of the cell phones, what price will most likely be used by Quick Connect?
A) $188.50
B) $31.20
C) $186.70
D) $173.20
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