Answer the Following Questions Using the Information Below

Answer the following questions using the information below:
Gold Coast Freshair (GCF) manufactures single room-sized air conditioners.The cost accounting system estimates manufacturing costs to be $120 per air conditioner,consisting of 75% variable costs and 25% fixed costs.The company has surplus capacity available.It is GCF's policy to add a 40% mark-up to full costs.
-A medium-sized motel chain is currently expanding and has decided to create more rooms and air condition all of its rooms,which are currently not air conditioned.GCF is invited to submit a bid to the motel chain.What per unit price will GCF MOST likely bid for this special order of 50 units?

A) $140.00 per unit
B) $120.00 per unit
C) $168.00 per unit
D) $71.25 per unit

Correct Answer:

Verified

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