Use the following information for questions
Red Grass Company produces high definition television sets and uses total cost-plus pricing.The following information is available for this product:
$$\begin{array} { l l }
\text { Fixed cost per unit } & \$ 100 \
\text { Variable cost per unit } & 300 \
\text { Total cost per unit } & 400 \
\text { Desired ROl per unit } & 140
\end{array}$$
-Red Grass Company's markup percentage would be
A)140%.
B)75%.
C)40%.
D)35%.

Question

Use the following information for questions 
Red Grass Company produces high definition television sets and uses total cost-plus pricing.The following information is available for this product:
 $$\begin{array} { l l } 
\text { Fixed cost per unit } & \$ 100 \
\text { Variable cost per unit } & 300 \
\text { Total cost per unit } & 400 \
\text { Desired ROl per unit } & 140
\end{array}$$
-Red Grass Company's markup percentage would be
A)140%.
B)75%.
C)40%.
D)35%.

Quizplus · Accepted Answer

The markup percentage is calculated based on the total cost per unit. Here, the total cost is $400, and the desired ROI per unit is $140. To find the markup percentage: $ \frac{140}{400} \times 100\% = 35\% $.

Use the Following Information for Questions Red Grass Company

Use the Following Information for Questions
Red Grass Company