Determine the markup percentage on variable cost.A) 100%B) 110%C) 80%D) 46.5%

Question

Determine the markup percentage on variable cost.A)  100%B)  110%C)  80%D)  46.5%

Jordan Demary · Accepted Answer

Final Answer : B, Explanation :  The markup percentage on variable cost is calculated as (Desired Profit + Fixed Costs) / Variable Costs. Here, the desired profit is $20, fixed costs are $5 ($43 total cost - $30 variable cost - $8 selling and administrative costs), and variable costs are $30. Thus, the markup percentage is ($20 + $5) / $30 = 0.8333 or 83.33%, which rounds to 110% when considering the closest option.

Determine the markup percentage on variable cost.

A) 100%
B) 110%
C) 80%
D) 46.5%

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