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Percentage markup

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The following data pertain to Tall Company's commercial wood thrower:

Variable manufacturing cost $400
Applied fixed manufacturing cost 160
Variable selling and administrative cost 60
Allocated fixed selling and administrative cost 25

For each of the following cost bases, determine the appropriate percentage markup that will result in a price of $980 for the wood thrower. (Round percentages to nearest one-hundredth of a percent.)
A. Variable manufacturing cost.
B. Absorption manufacturing cost.
C. Total cost.
D. Total variable cost.

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Solution Summary

The solution explains how to calculate the percentage markup based on variable manufacturing cost, absorption manufacturing cost, total cost and total variable cost.

Solution Preview

Markup = (Price-Cost)/Cost
Price= $980
A. Variable manufacturing cost.
Variable manufacturing cost = $400
Markup = (980-400)/400 = ...

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