Question

​Nguyen, Inc. has received a bid for 15 comma 000 units. The costing estimates show that the average cost per unit for this bid will be $ 700. The company uses costminusbased pricing and adds 25​% markup to total costs. What total price will Nguyen ask for the entire​ order? A. $ 10 comma 500 comma 000 B. $ 13 comma 125 comma 000 C. $ 7 comma 875 comma 000 D. $ 2 comma 625 comma 000

Answer 1

Answer:

Option (B) is correct.

Explanation:

Given that,

Received a bid = 15,000 units

Average cost per unit for this bid = $700

Markup to total costs = 25%

Total Cost of Order:

= Bid received × Average cost per unit for this bid

= 15,000 units × $700 per unit

= $10,500,000

Mark up total cost:

= Total Cost of Order × (1 + Markup to total costs)

= $10,500,000 × (1 + 25%)

= $10,500,000 × 1.25

= $13,125,000

Therefore, the total price will Nguyen ask for the entire​ order is $13,125,000.