In the variable-cost approach, the markup percentage covers the
A) desired ROI only.
B) desired ROI and fixed costs.
C) desired ROI and selling and administrative expenses.
D) fixed costs only.

Question

Quizplus · Accepted Answer

The markup percentage in the variable-cost approach covers both the desired ROI and the fixed costs. Selling and administrative expenses are not considered in the markup percentage as they are considered separate from the production costs.

In the Variable-Cost Approach, the Markup Percentage Covers the