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XYZ Inc., is preparing a bid to produce industrial equipment. The company has experienced the...

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Accounting

XYZ Inc., is preparing a bid to produce industrial equipment. The company has experienced the following costs:
Cumulative Total Cumulative Costs
Units Produced Materials Labor
10 $60,000 $120,000
20 120,000 216,000
40 240,000 388,800

At XYZ, variable overhead is applied on the basis of $1.00 per direct labor dollar. Based on historical costs, XYZ knows that the production of 40 units will incur $100,000 of fixed overhead costs. The bid request is for an additional 40 units; all companies submitting bids are allowed to charge a maximum of 25% above full cost for each order.

The maximum bid price that XYZ could submit for the 40 units is

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