Cool Air Inc., manufactures single room sized air conditioners.. The cost accounting system estimates manufacturing costs to be $190 per air conditioner, consistingof 70% variable costs and 30% fixed costs. The company has surplus capacity available. It is Cool Air Inc.'s policy to add a 20% markup to full costs.A medium sized motel chain is currently expanding and has decided to create more rooms and air condition all of its rooms, which are currently not air conditioned.Cool Air Inc. is invited to submit a bid to the motel chain. What per unit price will Cool Air Inc. most likely bid for this special order of 200 units? Assume that the priceis being fixed for a long - term commitment.O A. $133 per unitB. $247 per unitC. $190 per unitD. $228 ner unit

Since, The Company has Surplus Capacity Available than the Minimum Per Unit Price for the Special…

Answered: Cool Air Inc., manufactures single room…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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