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Question & Answer: Required Information Variable manufacturing cost Applied fixed manufacturing cost unit $430 280 Absorption manufa…..

Required Information Variable manufacturing cost Applied fixed manufacturing cost unit $430 280 Absorption manufacturing cost Variable selling and administrative cost Allocated fixed selling and administrative cost 710 50 100 Total cost $860 $430 Variable manufacturing cost Variable selling and administrative cost 50 Total variable cost $480 Based on planned monthly production of 44 units (or 528 units per year) The target profit is $56,000.

Required Information Variable manufacturing cost Applied fixed manufacturing cost unit $430 280 Absorption manufacturing cost Variable selling and administrative cost Allocated fixed selling and administrative cost 710 50 100 Total cost $860 $430 Variable manufacturing cost Variable selling and administrative cost 50 Total variable cost $480 Based on planned monthly production of 44 units (or 528 units per year) The target profit is $56,000.

Expert Answer

 

Markup percentage is = (Total Profit+Total cost)/(Annual volume * Absorbtion Manufacturing cost)

That is = (56000+(528*860))/(528*710)

= (510080/374880)

= 136.06%

Markup percentage is = 136.06%

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