Use the Information Below to Answer the Following Question(s)

question 4

Multiple Choice

Use the information below to answer the following question(s) .Northwoods manufactures rustic furniture.The cost accounting system estimates manufacturing costs to be $90 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% markup 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)$6,300
• B)$7,200
• C)$10,800
• D)$13,500
• E)$9,000

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Definitions:

Profit/(Loss)

The financial result of a company's operations and activities over a specific period, indicating net earnings or losses.

Associate Losses

Losses incurred from an investment in an associate, an entity over which the investor has significant influence but not control.

Equity Accounted Balance

A method of accounting whereby an investor recognizes its share of the profits and losses of its investee within its own financial statements.