Sierra Company produces its product at a total cost of $89 per unit. Of this amount, $14 per unit is selling and administrative costs. The total variable cost is $58 per unit, and the desired profit is $28 per unit. Determine the markup percentage using the (a) total cost, (b) product cost, and (c) variable cost methods. Round your answers to one decimal place. a. Total cost fill in the blank 1 % b. Product cost fill in the blank 2 % c. Variable cost fill in the blank 3 %

Respuesta :

Answer: and Explanation:

The computation of the markup percentage using the following cost is shown below:

a. Total cost

= Desired profit ÷ total cost

= $28 ÷ $89

= 31.46%

b. Under product cost

= Desired profit ÷ (total cost - seling & admin cost)

= ($28) ÷ ($89 - $14)

= 37.33%

c. Under variable cost

= Desired profit ÷ variable cost

= $28 ÷ $58

= 48.28%

By applying the above formulas we can easily calculate them