Kendrick Corporation sells a single product. The following information relates to the year just ended:
Number of units sold: 20,000
Variable cost per unit: $300
Total fixed cost: $3,000,000
Operating income: $4,200,000
Required:
A. Compute the company's selling price.
B. Compute the percentage markup on total cost. Round your answer to two decimal places.
C. Assume that Kendrick desired to change its practice of computing a markup on total cost to a markup on variable cost. If the Company wants to hold selling price constant, would the markup percentage increase or decrease? By how much?

Question

Quizplus · Accepted Answer

The Answer of Kendrick Corporation sells a single product. The following information relates to the year just ended:
Number of units sold: 20,000
Variable cost per unit: $300
Total fixed cost: $3,000,000
Operating income: $4,200,000
Required:
A. Compute the company's selling price.
B. Compute the percentage markup on total cost. Round your answer to two decimal places.
C. Assume that Kendrick desired to change its practice of computing a markup on total cost to a markup on variable cost. If the Company wants to hold selling price constant, would the markup percentage increase or decrease? By how much?

Kendrick Corporation Sells a Single Product