Answer the following questions using the information below:
Wilde Corporation budgeted the following costs for the production of its one and only product for the next fiscal year:
$\begin{array}{lr}
\text { Direct materials } & \$ 1,125,000 \
\text { Direct labor } & 775,000 \
\text { Manufacturing overhead } & \
\quad \text { Variable } & 840,000 \
\quad \text { Fixed } & 645,000\
\text { Selling and administrative }\
\text { Variable } & 360,000 \
\text { Fixed } & 480,000 \
\text { Total costs } & \$ 4,225,000
\end{array}$ Wilde has an annual target operating income of $900,000.
-The markup percentage for setting prices as a percentage of total manufacturing costs is ________.
A) 51.4%
B) 125.3%
C) 185.6%
D) 245.8%

Question

Answer the following questions using the information below:
Wilde Corporation budgeted the following costs for the production of its one and only product for the next fiscal year:
 $\begin{array}{lr}
\text { Direct materials } & \$ 1,125,000 \
\text { Direct labor } & 775,000 \
\text { Manufacturing overhead } & \
\quad \text { Variable } & 840,000 \
\quad \text { Fixed } & 645,000\
\text { Selling and administrative }\
\text { Variable } & 360,000 \
\text { Fixed } & 480,000 \
\text { Total costs } & \$ 4,225,000
\end{array}$ Wilde has an annual target operating income of $900,000.
-The markup percentage for setting prices as a percentage of total manufacturing costs is ________.
A) 51.4%
B) 125.3%
C) 185.6%
D) 245.8%

Quizplus · Accepted Answer

The total manufacturing costs are the sum of direct materials, direct labor, and manufacturing overhead (variable and fixed), which equals $3,385,000. The target operating income is $900,000. The markup percentage is calculated as (Target Operating Income / Total Manufacturing Costs) * 100 = ($900,000 / $3,385,000) * 100 = 26.6%. However, the question asks for the markup as a percentage of total manufacturing costs, which is (Total Costs + Target Operating Income) / Total Manufacturing Costs - 1 = ($4,225,000 + $900,000) / $3,385,000 - 1 = 51.4%.

Answer the Following Questions Using the Information Below: Wilde Corporation

Answer the Following Questions Using the Information Below:
Wilde Corporation