Swifty Corporation produces microwave ovens. The following per unit cost information is...

Question:

Swifty Corporation produces microwave ovens. The following per unit cost information is available:

Direct materials $28
Direct labor $25
Variable manufacturing overhead $12
Fixed manufacturing overhead $55
Variable selling and administrative expenses $15
Fixed selling and administrative expenses $28

Its desired ROI per unit is $29.

Compute the markup percentage using variable-cost pricing.

Markup Percentage:

Markup percentage means the cost plus the desired profit which a seller wants to sell its product to the customer or the retail customer. This will applied to the cost only.

Answer and Explanation:

Particulars Amount
Direct materials $28
Direct labor $25
Variable manufacturing overhead $12
Fixed manufacturing overhead $55
Variable selling and administrative expenses $15
Fixed selling and administrative expenses $28
Total $163
ROI (29 / 163) 17.79%


Learn more about this topic:

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How to Calculate Markup: Definition & Formula

from Principles of Marketing: Help and Review

Chapter 12 / Lesson 22
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