Answer the following questions using the information below:
Black Forrest manufactures rustic furniture. The cost accounting system estimates manufacturing costs to be $240 per table, consisting of 60% variable costs and 40% fixed costs. The company has surplus capacity available. It is Black Forrest policy to add a 50% markup to full costs.
-A large hotel chain is currently expanding and has decided to decorate all new hotels using the rustic style. Black Forrest is invited to submit a bid to the hotel chain. What per unit price will Black Forrest most likely bid on this long-term order?
A)$144 per unit
B)$216 per unit
C)$360 per unit
D)$240 per unit

Question

Quizplus · Accepted Answer

The full cost per table is $240. With a 50% markup, the bid price would be $240 + (50% of $240) = $360 per unit.

Answer the Following Questions Using the Information Below