Nguyen, Inc. has received a bid for 15 comma 000 units. The costing estimates show that the average cost per unit for this bid will be $ 700. The company uses costminusbased pricing and adds 20 % markup to total costs. What total price will Nguyen ask for the entire order? A. $ 2 comma 100 comma 000 B. $ 12 comma 600 comma 000 C. $ 10 comma 500 comma 000 D. $ 8 comma 400 comma 000

Question

Business

Lucille Hurst

8 May, 06:48

Nguyen, Inc. has received a bid for 15 comma 000 units. The costing estimates show that the average cost per unit for this bid will be $ 700. The company uses costminusbased pricing and adds 20 % markup to total costs. What total price will Nguyen ask for the entire order? A. $ 2 comma 100 comma 000 B. $ 12 comma 600 comma 000 C. $ 10 comma 500 comma 000 D. $ 8 comma 400 comma 000

+4

Answers (1)

Know the Answer?

Kole Murillo · Answer 1

B. $ 12 comma 600 comma 000

Explanation:

15,000 units x $700 cost per unit = 10,500,000 total cost

markup policy for the firm: 20% of total cost

the sales price will be the total cost for the order plus a 20% of that cost as a gross profit margin.

sales price = cost x (1 + 20%)

sales price = total cost x 1.20

sales price = 10,500,000 x 1.2 = 12,600,000