The markup percentage on product cost for the company's product is

A) 23.4%
B) 10.98%
C) 26.1%
D) 18%

Question

The markup percentage on product cost for the company's product isA)  23.4%B)  10.98%C)  26.1%D)  18%

Mukhil arasi · Accepted Answer

Final Answer : A, Explanation :  The markup percentage on product cost is calculated as follows:Markup percentage = (Desired profit / Product cost) x 100%Desired profit = 12% x $800,000 = $96,000Product cost = (Variable direct materials cost per unit x Units produced) + (Variable direct labor cost per unit x Units produced) + (Variable factory overhead cost per unit x Units produced) + (Variable selling and administrative cost per unit x Units produced)Product cost = ($5.50 x 45,000) + ($7.65 x 45,000) + ($2.25 x 45,000) + ($0.90 x 45,000) = $414,750Markup percentage = ($96,000 / $414,750) x 100% = 23.4%

The markup percentage on product cost for the company's product is

A) 23.4%
B) 10.98%
C) 26.1%
D) 18%

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