Magpie Corporation uses the total cost concept of product pricing. Below is cost

Question

Magpie Corporation uses the total cost concept of product pricing. Below is cost information for the production and sale of 60,000 units of its sole product. Magpie desires a profit equal to 25% rate of return on invested assets of $700,000.
$38,700 Fixed factory overhead cost $7,500 Fixed selling and administrative costs $4.60 Variable direct materials cost per unit $1.88 Variable direct labor cost per unit $1.13 Variable factory overhead cost per unit $4.50 Variable selling and administrative cost per unit
The markup percentage on total cost for the company's product is:
a) 21%
b) 22.70%
c) 15.80%
d) 24%

Explanation / Answer

The markup percentage on total cost for the company's product is: a) 21%

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