Grounded Coffee Products manufactures coffee tables.Grounded Coffee 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: $\begin{array}{ll}
\text { Output urits } & 20,000 \text { tables } \
\text { Machine-hours } & 8,000 \text { hours } \
\text { Direct manufacturing labor-hours } & 10,000 \text { hours } \
\text { Direct materials per unit } & \$ 105 \
\text { Direct manufacturing labor per hour } & \$ 10\\text { Variable manufacturing overhead costs } & \$ 322,500 \
\text { Fixed manufacturing overhead costs } & \$ 1,200,000 \
\text { Product and process design costs } & \$ 1,100,000 \
\text { Marketing and distribution costs } & \$ 1,125,000
\end{array}$ For long-run pricing of the coffee tables,what price will most likely be used by Grounded Coffee?
A) $134.76
B) $161.70
C) $222.25
D) $266.70

Question

Quizplus · Accepted Answer

The long-run price includes full costs (direct materials, direct labor, variable and fixed manufacturing overhead) plus a 20% markup. Calculate the total cost per unit and add the markup to find the price.

Grounded Coffee Products Manufactures Coffee Tables For Long-Run Pricing of the Coffee Tables,what Price Will Most