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The procurement manager from a large merchandising firm has called your vice president for production to...

The procurement manager from a large merchandising firm has called your vice president for production to get a price quote for an additional 200 units of a given product. The vice president has asked you to prepare a cost estimate. The number of hours required to produce a unit is 4. The average labor rate is $16 per hour. The materials cost $22 per unit. Overhead for an additional 200 units is estimated at 40% of the direct labor cost. If the company wants to have a 35% profit margin, what should be the total price to quote?

A. $68,877

B. $61,890

C. $37,665

D. None of these

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