A manufactures the chairs. Manufacturing costs are expected to be £120 per chair, consisting of 70% variable costs and 30% fixed costs. The company has surplus capacity available. A's policy is to add a 60% profit margin to full costs. A large restaurants chain is going to replace the chairs in all branches. A is invited to submit a bid to the restaurant's chain. What is the lowest price per chair. A should bid on this long-term order? 1. £24,000 2. £14,400 3. £16,800 4. £38,400

A manufactures the chairs. Manufacturing costs are expected to be £120 per chair, consisting of 70% variable costs and 30% fixed costs. The company has surplus capacity available. A's policy is to add a 60% profit margin to full costs. A large restaurants chain is going to replace the chairs in all branches. A is invited to submit a bid to the restaurant's chain. What is the lowest price per chair. A should bid on this long-term order? 1. £24,000 2. £14,400 3. £16,800 4. £38,400

Marketing

20th Edition

ISBN:9780357033791

Author:Pride, William M

Publisher:Pride, William M

Chapter19: Pricing Concepts

Section: Chapter Questions

Problem 6DRQ

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