Reference no: EM139740

A company has $27 per unit in variable costs and $1,000,000 per year in fixed costs. Demand is estimated to be 100,000 units annually. Evaluate the price if a markup of 40% on total cost is used to determine the price?

A) $51.80
B) $37
C) $27
D) $37.80

A company using activity based pricing marks up the direct cost of goods by 30% plus charges customers for indirect costs based on the activities utilized by the customer. Indirect costs are charged as follows: $8.00 per order placed; $4.00 per separate item ordered; $30.00 per return. A customer places 10 orders with a total direct cost of $3,000, orders 300 separate items, and makes 5 returns. What will the customer be charged?

A) $5,330
B) $3,000
C) $5,759
D) $3,900