Answer the Following Questions Using the Information Below:
Gracius Manufacturing

question 48

Multiple Choice

Answer the following questions using the information below:
Gracius Manufacturing is approached by a European customer to fulfill a one-time-only special order for a product similar to one offered to domestic customers. Gracius Manufacturing has a policy of adding a 10% markup to full costs and currently has excess capacity. The following per unit data apply for sales to regular customers:
$\begin{array}{l}\text { Variable costs: }\\\begin{array}{lr}\text { Direct materials } & \$ 30 \\\text { Direct labor } & 10 \\\text { Manufacturing overhead } & 20 \\\text { Marketing costs } & 10\end{array}\\\text { Fixed costs: }\\\begin{array}{lr}\quad {\text { Manufacturing overhead }} & 100 \\\quad \text { Marketing costs } & 20 \\\text { Total costs } & 190 \\\text { Markup (10\% of total costs) } & 19 \\\text { Estimated æelling price } & \$ 209\end{array}\end{array}$
-For Gracius Manufacturing,what is the minimum acceptable price of this one-time-only special order?

• A) $40
• B) $60
• C) $70
• D) $190

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