Yelk Garage uses time and materials pricing. It is setting prices for next year using the following information: What should Yelk set as the materials markup per dollar of materials used?
A) 25%.
B) 5%.
C) 20%.
D) 35%.
E) 30%.

Question

Yelk Garage uses time and materials pricing. It is setting prices for next year using the following information:  What should Yelk set as the materials markup per dollar of materials used?
A) 25%. 
B) 5%. 
C) 20%. 
D) 35%. 
E) 30%.

Quizplus · Accepted Answer

Markup = Materials overhead % + Profit margin %: 5% + 20% = 25%
Materials purchasing, handling, and storage ($41,250 / $825,000) = 5%

Yelk Garage Uses Time and Materials Pricing