BLG produces and sells yachts for wealthy customers. BLG's accountants produced the data shown below as a basis for client negotiations for the coming year: Assume that all the preceding costs are avoidable. The company will incur an additional $800 in unavoidable costs during the coming year. BLG's managers want to achieve a profit margin of 80% based on total costs. Which customer's yacht will have the lowest total cost if unavoidable costs are allocated based on the cost of a basic yacht?

Question

Quizplus · Accepted Answer

Big Winner has the lowest total cost if unavoidable costs are allocated based on the cost of a basic yacht.

BLG Produces and Sells Yachts for Wealthy Customers