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Answer the Following Questions Using the Information Below:
Alice Water

Question 4

Multiple Choice

Answer the following questions using the information below:
Alice Water Coolers is approached by Mrs Hu Qi,a new customer,to fulfil a large one-time-only special order for a product similar to one offered to regular customers.Alice Water Coolers has excess capacity.The following per unit data apply for sales to regular customers:
 Direct materials $250 Direct manufacturing labour 80 Variable manufacturing support 50 Fixed manufacturing support 100 Total manufacturing costs 480 Mark-up (30%)  144 Estimated selling price $624\begin{array} { l r } \text { Direct materials } & \$ 250 \\\text { Direct manufacturing labour } & 80 \\\text { Variable manufacturing support } & 50 \\\text { Fixed manufacturing support } & \underline { 100 } \\{ \text { Total manufacturing costs } } & 480 \\\text { Mark-up (30\%) } & \underline { 144 } \\\text { Estimated selling price } & \underline {\$ 624}\end{array}
-If Mrs Hu Qi wanted a long-term commitment for supplying this product,what price would MOST likely be quoted to her?


A) $330
B) $380
C) $480
D) $624

Correct Answer:

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