mark up cost

fenil 12 April 2020 at 17:06 PM

ACB Inc. produces a product called Zite. The following cost information is available with respect to Zite on a per unit basis: direct materials, $5; direct labor, $4; variable manufacturing overhead, $2; variable marketing, $2; fixed manufacturing, $4; fixed marketing $2. If ACB wants to earn a 55% markup on the variable cost, what is the amount of the markup? a) $5.50 b) $7.15 c) $8.25 d) $9.35

Reply this

FACULTY 09 May 2020 at 01:15 PM

So mark up is 55% based on variable cost

variable cost = direct material +direct labor+variable manufacturing overhead+variable marketing cost

=5+4+2+2

= 13

so mark up amount is 55% of 13 = 7.15 (option B)

Reply this