Webster,Inc.has received a bid for 14,000 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 Webster ask for the entire order?
A)$8,400,000
B)$7,000,000
C)$1,400,000
D)$5,600,000

Question

Quizplus · Accepted Answer

A)Total cost of order = $500 × 14,000 units = $7,000,000
Bid price = $7,000,000 × 1.2% = $8,400,000