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Nancy Corporation - Average Markup Percentage

Problem 1 - Nancy Company has budgeted sales of $300,000 with the following budgeted costs:

Direct materials $60,000
Direct manufacturing labor 40,000

Factory overhead

Variable 30,000

Fixed 50,000

Selling and administrative expenses

Variable 20,000

Fixed 30,000

Question 1: Compute the average markup percentage for setting prices as a percentage of the full cost of the product

Question 2: Compute the average markup percentage for setting prices as a percentage of the variable cost of the product

Question 3: Compute the average markup percentage for setting prices as a percentage of the variable manufacturing costs

Solution Preview

1 - Full Cost = (60+40+30+50) = 180,000

Markup % = (300-180)/180 = 66.67%

2 - Variable Cost ...

Solution Summary

The solution computes Nancy Corporation - Average Markup Percentage for setting prices.

$2.19