Answer the Following Questions Using the Information Below

question 34

Multiple Choice

Answer the following questions using the information below:
Acacia Furniture manufactures rustic furniture.The cost accounting system estimates manufacturing costs to be $140 per table,consisting of 60% variable costs and 40% fixed costs.The company has surplus capacity available.It is Acacia Furniture's policy to add a 50% mark-up to full costs.
-A large hotel chain is currently expanding and has decided to decorate all new hotels using the rustic style.Acacia Furniture is invited to submit a bid to the hotel chain.What per unit price will Acacia Furniture MOST likely bid on this long-term order?

• A)$108 per unit
• B)$72 per unit
• C)$210 per unit
• D)$140 per unit

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Definitions:

Negotiate

The process of discussing something with one or more people in order to reach an agreement or compromise.

Assignment

The act of transferring rights or duties under a contract to another party.

Equity Bank

A financial institution that offers banking services with a focus on equity financing, or alternatively, a bank that has equity in other companies.

Payee's Bank

The bank where the recipient of a check or electronic payment has an account, responsible for processing and clearing the payment.