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Author Question: Golden Generator Supply is approached by Mr. Stephen, a new customer, to fulfill a large ... (Read 55 times)

asmith134

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Question 1

For long-run pricing decisions, using stable prices has the advantage of ________.
◦ minimizing the need to monitor competitor's prices frequently
◦ reducing the need to change cost structures frequently
◦ reducing competition
◦ helping to build buyer-seller relationships

Question 2

Golden Generator Supply is approached by Mr. Stephen, a new customer, to fulfill a large one-time-only special order for a product similar to one offered to regular customers. Golden Generator Supply has excess capacity. The following per unit data apply for sales to regular customers:

Direct materials$190
Direct manufacturing labor180
Variable manufacturing support280
Fixed manufacturing support140
Total manufacturing costs790
Markup (10% of total manufacturing costs)79
Estimated selling price$869

If Mr. Stephen wanted a long-term commitment, and not a one-time-only special order, for supplying this product, calculate the most likely price to be quoted assuming the markup remains the same?
◦ $650
◦ $790
◦ $869
◦ $370


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Marked as best answer by asmith134 on Mar 6, 2021

jasonq

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asmith134

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Reply 2 on: Mar 6, 2021
Great answer, keep it coming :)


meow1234

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Reply 3 on: Yesterday
:D TYSM

 

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