Gracius Manufacturing is approached by a European customer to fulfill a one-time-only special order for a product similar to one offered to domestic customers. Gracius Manufacturing has a policy of adding a 20% markup to full costs and currently has excess capacity. The following per unit data apply for sales to regular customers:
Variable costs:
Fixed costs:
Manufacturing overhead | 110 |
Markup (20% of total costs) | 50 |
Estimated selling price | $300 |
If the European customer 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?
◦ $110
◦ $250
◦ $300
◦ $190