Answer the Following Questions Using the Information Below

question 59

Multiple Choice

Answer the following questions using the information below:
Northwoods manufactures rustic furniture.The cost accounting system estimates manufacturing costs to be $100 per table,consisting of 80% variable costs and 20% fixed costs.The company has surplus capacity available.It is Northwoods' policy to add a 50% mark-up to full costs.
-Northwoods is invited to bid on a one-time-only special order to supply 100 rustic tables.What is the lowest price Northwoods should bid on this special order?

• A)$9000
• B)$8000
• C)$13 500
• D)$6300

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Definitions:

Marginal Revenue

The revenue boost a firm experiences from the sale of an additional unit of a product or service.

Burritos

A Mexican dish consisting of a wheat flour tortilla rolled or folded around a filling, typically including beans, cheese, meat, and rice.

Marginal Revenue

The added financial gain received from selling an additional product or service unit.

Total Revenue

The total amount of money a company receives from its sales of goods or services, calculated as the quantity sold multiplied by the sale price.