For long-run pricing of the cell phones, what price will most likely be used by Quick Connect?
Quick Connect manufactures high-tech cell phones. Quick Connect has a policy of adding a 20% markup to full costs and currently has excess capacity. The following information pertains to the company's normal operations per month:
Output units 1,250 phones
Machine-hours 750 hours
Direct manufacturing labor-hours 700 hours
Direct materials per unit $20
Direct manufacturing labor per hour $8
Variable manufacturing overhead costs $175,000.00
Fixed manufacturing overhead costs $126,300
Product and process design costs $143,000
Marketing and distribution costs $153,645
A) $237.32
B) $402.27
C) $502.84
D) $603.41
Answer: D
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