Your Company Produces 700,000 Widgets Per Year but Has the Capacity

question 88

Multiple Choice

Your company produces 700,000 widgets per year but has the capacity to produce 950,000 units.Company records show the following; full product costs = $85 per unit, which includes fixed manufacturing overhead of $11, and variable overhead of $4 per unit, and direct variable costs of $22, all based on the current 700,000 production run.If the company wanted to bid on a special one-time order, based on the above information only, what would be its minimum bid?

• A)$59
• B)$81
• C)$63
• D)$74
• E)$85

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Definitions:

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