Hordel Company needs to determine a markup for a new product.Hordel expects to sell 5,000 units and wants a target profit of $82 per unit.Additional information is as follows: $$\begin{array} { l r }
\text { Variable product cost per unit } & \$ 79 \
\text { Variable administrative cost per unit } & 21 \
\text { Total fixed overhead } & 42,000 \
\text { Total fixed administrative } & 31,000
\end{array}$$ Using the variable cost method,what markup percentage to variable cost should be used?
A)80.1%
B)98.20%
C)94.1%
D)91.7%
E)96.6%

Question

Hordel Company needs to determine a markup for a new product.Hordel expects to sell 5,000 units and wants a target profit of $82 per unit.Additional information is as follows: $$\begin{array} { l r } 
\text { Variable product cost per unit } & \$ 79 \
\text { Variable administrative cost per unit } & 21 \
\text { Total fixed overhead } & 42,000 \
\text { Total fixed administrative } & 31,000
\end{array}$$ Using the variable cost method,what markup percentage to variable cost should be used?
A)80.1%
B)98.20%
C)94.1%
D)91.7%
E)96.6%

Quizplus · Accepted Answer

The Answer of Hordel Company needs to determine a markup for a new product.Hordel expects to sell 5,000 units and wants a target profit of $82 per unit.Additional information is as follows: $$\begin{array} { l r } 
\text { Variable product cost per unit } & \$ 79 \
\text { Variable administrative cost per unit } & 21 \
\text { Total fixed overhead } & 42,000 \
\text { Total fixed administrative } & 31,000
\end{array}$$ Using the variable cost method,what markup percentage to variable cost should be used?
A)80.1%
B)98.20%
C)94.1%
D)91.7%
E)96.6%

Hordel Company Needs to Determine a Markup for a New