Grounded Coffee Products Manufactures Coffee Tables For Long-Run Pricing of the Coffee Tables,what Price Will Most

question 179

Multiple Choice

Grounded Coffee Products manufactures coffee tables.Grounded Coffee Products has a policy of adding a 20% markup to full costs and currently has excess capacity.The following information pertains to the company's normal operations per month: $\begin{array}{ll}\text { Output urits } & 20,000 \text { tables } \\\text { Machine-hours } & 8,000 \text { hours } \\\text { Direct manufacturing labor-hours } & 10,000 \text { hours } \\\text { Direct materials per unit } & \$ 105 \\\text { Direct manufacturing labor per hour } & \$ 10\\\text { Variable manufacturing overhead costs } & \$ 322,500 \\\text { Fixed manufacturing overhead costs } & \$ 1,200,000 \\\text { Product and process design costs } & \$ 1,100,000 \\\text { Marketing and distribution costs } & \$ 1,125,000\end{array}$ For long-run pricing of the coffee tables,what price will most likely be used by Grounded Coffee?

• A) $134.76
• B) $161.70
• C) $222.25
• D) $266.70

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