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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

Required:
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.

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.

\$2.49