Purple Trees Manufactures Rustic Furniture

Multiple Choice

Purple Trees manufactures rustic furniture.The cost accounting system estimates manufacturing costs to be $240 per table,consisting of 60% variable costs and 40% fixed costs.The company has surplus capacity available.It is Purple Trees' policy to add a 75% markup to full costs. Purple Trees is invited to bid on a one-time-only special order to supply 100 rustic tables.What is the lowest price Purple Trees should bid on this special order?

A) $7,200
B) $12,000
C) $14,400
D) $42,000