Which of the following formulas represents the markup percentage on total cost?
A)Target profit ÷ Variable cost.
B)Target profit ÷ Annual volume.
C)(Target profit x Total cost per unit) ÷ Annual volume.
D)(Annual volume x Total cost per unit) ÷ Target profit.
E)Target profit ÷ (Annual volume x Total cost per unit).

Question

Quizplus · Accepted Answer

The markup percentage on total cost is calculated by dividing the target profit by the total cost per unit and the annual volume. Thus, the formula represented in option E is the correct answer. The other options do not calculate the markup percentage on total cost.

Which of the Following Formulas Represents the Markup Percentage on Total