Answer the Following Questions Using the Information Below

question 78

Multiple Choice

Answer the following questions using the information below:
Pearl Corp. applies manufacturing overhead costs to products at a budgeted indirect-cost rate of $60 per direct manufacturing labor-hour. A retail outlet has requested a bid on a special order of a necklace. Estimates for this order include: Direct materials of $50,000; 400 direct manufacturing labor-hours at $20 per hour; and a 30% markup rate on total manufacturing costs.
-The bid price for this special order is ________.

• A) $66,000
• B) $106,600
• C) $86,600
• D) $116,600

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Definitions:

Economic Climate

The overall state and conditions of an economy, affecting business confidence, consumer spending, and financial markets.

Economies Of Scale

The cost advantage achieved when production becomes efficient, as the output increases, the average cost per unit decreases.

Production Expertise

The specialized skills and knowledge in creating and manufacturing goods effectively and efficiently.

Gray Market Activities

The trade of legal goods through unauthorized, unofficial, or unintended distribution channels.