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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 Preview

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

    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.