Brief Exercise 22-11 Your answer is incorrect. Try again. Morales Corporation pr

Question

Brief Exercise 22-11 Your answer is incorrect. Try again. Morales Corporation produces microwave units. The following per unit cost information is available: direct materials $30; direct labor $24; variable manufacturing overhead $16; fixed manufacturing overhead $40; variable selling and administrative expenses $20; and fixed selling and administrative expenses $24. Its desired ROI per unit is $31. Compute the markup percentage using variable-cost pricing. (Round answer to 2 decimal places, e.g. 10.50.) Markup percentage

Explanation / Answer

Total unit cost = Direct materials + Direct labor + Variable manufacturing overhead + Fixed manufacturing overhead + Variable selling and administrative expenses + Fixed selling and administrative expenses = $30 + $24 + $16 + $40 + $20 + $24 = $154

Mark up percentage = (Desired ROI per unit / Total unit cost) × 100

Mark up percentage = ($31 / $154)  × 100

Mark up percentage = 20.13%

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