The following costs relate to Tower Company: Variable manufacturing cost, $30; variable selling and administrative cost, $8; applied fixed manufacturing overhead, $15; and allocated fixed selling and administrative cost, $4.
-If Tower uses total-cost pricing formulas, the company's markup percentage would be computed on the basis of:
A) $30.
B) $38.
C) $45.
D) $57.
E) None of the answers is correct.

Question

The following costs relate to Tower Company: Variable manufacturing cost, $30; variable selling and administrative cost, $8; applied fixed manufacturing overhead, $15; and allocated fixed selling and administrative cost, $4. 
-If Tower uses total-cost pricing formulas, the company's markup percentage would be computed on the basis of:
A) $30.
B) $38.
C) $45.
D) $57.
E) None of the answers is correct.

Quizplus · Accepted Answer

Total-cost pricing formulas consider all costs involved in producing and selling a product. This includes variable manufacturing costs ($30), variable selling and administrative costs ($8), applied fixed manufacturing overhead ($15), and allocated fixed selling and administrative costs ($4), totaling $57.

The Following Costs Relate to Tower Company: Variable Manufacturing Cost