Girasol Products Is Thinking of Expanding Their Product Line The Cost of the New Product Is $95 Per Unit

Multiple Choice

Girasol Products is thinking of expanding their product line. Their current income statement is as follows: $\begin{array}{lrr}\text { Revenues } & & \$ 600,000 \\\text { Cost of Goods Sold: } & & \\\text { Direct Materials } & \$ 250,000 & \\\text { Direct Labor } & 100,000 & \\\text { Overhead } & 80,000 & 430,000 \\\text { Gross Frofit } & & 170,000 \\\text { Selling and Administrative } & & 70,000 \\\text { Operating Income } & & \$ 100,000 \\\hline\end{array}$
The cost of the new product is $95 per unit made up of $50 of direct materials, $35 of direct labor and $10 of overhead per unit. What is the bid price assuming Girasol utilizes a mark-up on direct materials?

A) $119
B) $133
C) $70
D) $19.77