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Novosadov [1.4K]
3 years ago
9

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

oduct 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. ​$869 B. ​$650 C. ​$370 D. ​$790
Business
1 answer:
pshichka [43]3 years ago
3 0

Answer:

A. ​$869

Explanation:

If it charges a price below of their full cos and mark-up it wouldn't be able to sustain it in the long-term

When company's receive a one-time-only then, they may be willing to charge a lower price to cover a portion of their fixed cost when there is spare capacity but, in long-term they will have to charge at full cost else, they will lose money

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Answer:

Explanation:

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2 years ago
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