Answer the Following Questions Using the Information Below

question 202

Multiple Choice

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.
-Black Forrest is invited to bid on a one-time-only special order to supply 200 rustic tables. What is the lowest price Black Forrest should bid on this special order?

• A)$43,200
• B)$14,400
• C)$24,000
• D)$28,800

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Definitions:

Seafloor Spreading

The process by which new oceanic crust is formed at mid-ocean ridges and moves away from the ridge, contributing to continental drift.

Subduction

When tectonic plates converge, the movement of one plate beneath another into the mantle is referred to as subduction.

Continental Margins

The zones of the ocean floor that separate the thin oceanic crust from thick continental crust, including the continental shelf, slope, and rise.

Seafloor Spreading

The formation of new oceanic crust at mid-ocean ridges and its gradual movement away from the ridge.