Use the information below to answer the following question(s).Ferryman Products manufactures coffee tables.Ferryman Products has a policy of adding a 20% markup to full costs and currently has excess capacity.The following information pertains to the company's normal operations per month:

-Ferryman Products is approached by an overseas customer to fulfill a one-time-only special order for 1,000 units.All cost relationships remain the same except for a one-time setup charge of $20,000.No additional design, marketing, or distribution costs will be incurred.What is the minimum acceptable bid per unit on this one-time-only special order?
A)$134.75
B)$457.25
C)$114.75
D)$161.70
E)$122.75

Question

Use the information below to answer the following question(s).Ferryman Products manufactures coffee tables.Ferryman Products has a policy of adding a 20% markup to full costs and currently has excess capacity.The following information pertains to the company's normal operations per month:
  
-Ferryman Products is approached by an overseas customer to fulfill a one-time-only special order for 1,000 units.All cost relationships remain the same except for a one-time setup charge of $20,000.No additional design, marketing, or distribution costs will be incurred.What is the minimum acceptable bid per unit on this one-time-only special order?
A)$134.75 
B)$457.25 
C)$114.75 
D)$161.70 
E)$122.75

Quizplus · Accepted Answer

The minimum acceptable bid per unit on this one-time-only special order is $134.75. This is calculated by dividing the total cost of the order, which is $134,750 (1,000 units x $134.75 per unit), by the number of units ordered, which is 1,000.

Use the Information Below to Answer the Following Question(s)