Green Park Recreation Is Exploring a Competitive Bidding Situation Which of the Following Cost Figures Would Be Used in Firm

question 23

Multiple Choice

Green Park Recreation is exploring a competitive bidding situation. The firm, which currently has no excess capacity, estimates the following costs for a project to be performed for the Morningside School District: $$\begin{array} { l r } \text { Direct material } & \$ 220,000 \\\text { Direct labor } & 130,000 \\\text { Allocated variable overhead } & 91,000 \\\text { Allocated fixed cost } & 40,000\end{array}$$ Which of the following cost figures would be used in determining a minimum price if Green Park decides to bid on the Morningside project?

• A) $131,000.
• B) $350,000.
• C) $441,000.
• D) $481,000.
• E) None of the other answers are correct.

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Definitions:

Economic Theory

The study of how goods, services, and wealth are produced, distributed, and consumed in society.

Demand

The desire for certain goods or services backed by the ability and willingness to pay for them.

Luxury Goods

High-end items that are not necessary for survival but are desired for their quality, status, or aesthetics.

Doubled Income

A situation where an individual's or entity's income increases to twice its initial amount.