Golden Generator Supply is approached by Mr. Stephen, a new customer, to fulfill a large one-time-only...

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Golden Generator Supply is approached by Mr. Stephen, a new customer, to fulfill a large one-time-only...

Golden Generator Supply is approached by Mr. Stephen, a new customer, to fulfill a large one-time-only 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 $190

Direct manufacturing labor 180

Variable manufacturing support 280

Fixed manufacturing support 140

Total manufacturing costs 790

Markup (10% of total manufacturing costs) 79

Estimated selling price $869

If Mr. Stephen 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?

	A.	$650
	B.	$790
	C.	$869
	D.	$370

business accounting

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Answer 1

Answer #1

Calculate most likely price

Direct material	190
Direct labor	180
Variable manufacturing overhead	280
Price	650

So answer is a) $650

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Answer 2

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