Greenland Sports, Inc. has been asked to submit a bid to the National Hockey League on supplying 1,000 pairs of professional quality skates. The cost per pair of skates has been determined as follows:
Direct materials $80
Direct Labor $60
Variable Overhead $30
Fixed overhead (allocated) $20
Other non manufacturing costs associated with each pair of skates are:
Variable selling cost (commission) $25
Fixed selling and administrative cost $10
Assume the commission on the sale of skates to the National Hockey League would be reduced to $15 per pair and that available production capacity exists to produce the 1,000 pairs of skates. The lowest price the firm can bid is some price greater than:
A. $185
B. $190
C. $215
D. $225
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