Yakking Co. manufactures mobile cellular equipment and develops a price for the product by using the variable cost concept. Yakking incurs variable costs of $1,900,000 in the production of 100,000 units while fixed costs total $50,000. The company employs $4,725,000 of assets and wishes to earn a profit equal to a 10% rate of return on assets.
(a) Compute a markup percentage based on variable cost.
(b) Determine a selling price.
Round your markup percentage to one decimal place, and other intermediate calculations and final answer to two decimal places.

Question

Yakking Co. manufactures mobile cellular equipment and develops a price for the product by using the variable cost concept. Yakking incurs variable costs of $1,900,000 in the production of 100,000 units while fixed costs total $50,000. The company employs $4,725,000 of assets and wishes to earn a profit equal to a 10% rate of return on assets.
(a) Compute a markup percentage based on variable cost. 
(b) Determine a selling price. 
Round your markup percentage to one decimal place, and other intermediate calculations and final answer to two decimal places.

Quizplus · Accepted Answer

The Answer of Yakking Co. manufactures mobile cellular equipment and develops a price for the product by using the variable cost concept. Yakking incurs variable costs of $1,900,000 in the production of 100,000 units while fixed costs total $50,000. The company employs $4,725,000 of assets and wishes to earn a profit equal to a 10% rate of return on assets.
(a) Compute a markup percentage based on variable cost. 
(b) Determine a selling price. 
Round your markup percentage to one decimal place, and other intermediate calculations and final answer to two decimal places.