Custom Shoes Co.has gathered the following information concerning one model of shoe: $$\begin{array} { l l }
\text { Variable manufacturing costs } & \$ 40,000 \
\text { Variable selling and administrative costs } & \$ 20,000 \
\text { Fixed manufacturing costs } & \$ 160,000 \
\text { Fixed selling and administrative costs } & \$ 120,000 \
\text { Investment } & \$ 1,700,000 \
\text { ROl } & 30 \% \
\text { Planned production and sales } & 5,000 \text { pairs }
\end{array}$$
- What is the markup percentage?
A)150%
B)255%
C)850%
D)182%

Question

Custom Shoes Co.has gathered the following information concerning one model of shoe: $$\begin{array} { l l } 
\text { Variable manufacturing costs } & \$ 40,000 \
\text { Variable selling and administrative costs } & \$ 20,000 \
\text { Fixed manufacturing costs } & \$ 160,000 \
\text { Fixed selling and administrative costs } & \$ 120,000 \
\text { Investment } & \$ 1,700,000 \
\text { ROl } & 30 \% \
\text { Planned production and sales } & 5,000 \text { pairs }
\end{array}$$ 
- What is the markup percentage?
A)150%
B)255%
C)850%
D)182%

Quizplus · Accepted Answer

The markup percentage is calculated as follows:Markup percentage = (Selling price - Cost) / CostSelling price = Variable manufacturing costs + Variable selling and administrative costs + Fixed manufacturing costs + Fixed selling and administrative costs + ProfitProfit = Investment * ROIProfit = $1,700,000 * 0.30 = $510,000Selling price = $40,000 + $20,000 + $160,000 + $120,000 + $510,000 = $850,000Cost = Variable manufacturing costs + Variable selling and administrative costs = $40,000 + $20,000 = $60,000Markup percentage = ($850,000 - $60,000) / $60,000 = 14.17 or 150%

Custom Shoes Co - What Is the Markup Percentage? A)150% B)255% C)850% D)182

Custom Shoes Co - What Is the Markup Percentage?
A)150%
B)255%
C)850%
D)182