Magpie Corporation uses the total cost method of product pricing. Below is cost information for the production and sale of 60,000 units of its sole product. Magpie desires a profit equal to a 25% return on invested assets of $700,000.
-The markup percentage on total cost for Magpie's product is
A)21.0%
B)22.6%
C)15.8%
D)24.0%

Question

Magpie Corporation uses the total cost method of product pricing. Below is cost information for the production and sale of 60,000 units of its sole product. Magpie desires a profit equal to a 25% return on invested assets of $700,000.​  ​
-The markup percentage on total cost for Magpie's product is
A)21.0% 
B)22.6% 
C)15.8% 
D)24.0%

Quizplus · Accepted Answer

The markup percentage on total cost is calculated as (Markup / Cost) * 100. If the cost is given and the selling price is known, the markup can be found by subtracting the cost from the selling price. Without specific numbers provided in the question, the correct answer is based on the understanding of how to calculate markup percentage on total cost, which is represented by option B, 22.6%. This suggests that the given information in the question (not provided here) leads to a calculation that results in a 22.6% markup on total cost.

Magpie Corporation Uses the Total Cost Method of Product Pricing