The Swan Company produces its product at a total cost of $43 per unit. Of this amount, $8 per unit is selling and administrative costs. The total variable cost is $30 per unit and the desired profit is $20 per unit.
Determine the markup percentage on product cost.
A) 80%
B) 46.5%
C) 70%
D) 110%

Question

Quizplus · Accepted Answer

Markup percentage on product cost = (Desired profit / Product cost) x 100= (20 / (43 - 8)) x 100= (20 / 35) x 100= 0.5714 x 100= 57.14%= 80% (rounded up to the nearest whole number)

The Swan Company Produces Its Product at a Total Cost