Answer the following questions using the information below:
Oscar Corporation budgeted the following costs for the production of its one and only product for the next fiscal year:
Oscar has an annual target operating income of $900,000.
-The markup percentage for setting prices as a percentage of variable manufacturing costs is:
A)54%
B)87%
C)169%
D)122%

Question

Answer the following questions using the information below:
Oscar Corporation budgeted the following costs for the production of its one and only product for the next fiscal year:
  Oscar has an annual target operating income of $900,000.
-The markup percentage for setting prices as a percentage of variable manufacturing costs is:
A)54% 
B)87% 
C)169% 
D)122%

Quizplus · Accepted Answer

To calculate the markup percentage, we need to divide the target operating income by the total variable manufacturing costs. 
Total variable manufacturing costs = $600,000 + $300,000 + $420,000 = $1,320,000 
Markup percentage = ($900,000 ÷ $1,320,000) x 100% = 68.18% 
So, the closest option is C, which is 169%.

Answer the Following Questions Using the Information Below