Author Question: Jack's Back Porch manufactures rustic furniture. The cost accounting system estimates manufacturing ... (Read 81 times)

audragclark · **on:** Mar 6, 2021

Jack's Back Porch manufactures rustic furniture. The cost accounting system estimates manufacturing costs to be $270 per table, consisting of 80% variable costs and 20% fixed costs. The company has surplus capacity available. It is Jack's Back Porch's policy to add a 60% markup to full costs.

A large hotel chain is currently expanding and has decided to decorate all new hotels using the rustic style. Jack's Back Porch is invited to submit a bid to the hotel chain. What per unit price will Jack's Back Porch most likely bid on this long-term order?
◦ $86.40 per unit
◦ $162.00 per unit
◦ $345.60 per unit
◦ $432.00 per unit

bbburns21 · **Reply #1 on:** Mar 6, 2021

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