Nguyen,Inc.has received a bid for 15,000 units.The costing estimates show that the average cost per unit for this bid will be $500.The company uses cost-based pricing and adds 20% markup to total costs.What total price will Nguyen ask for the entire order?
A)$9,000,000
B)$7,500,000
C)$1,500,000
D)$6,000,000

Question

Quizplus · Accepted Answer

The total cost for 15,000 units is 15,000 * $500 = $7,500,000. With a 20% markup, the total price is $7,500,000 + (20% of $7,500,000) = $7,500,000 + $1,500,000 = $9,000,000.