An airplane manufacturer has annual fixed costs of $50 million. Its variable costs are expected to be

Question:

An airplane manufacturer has annual fixed costs of $50 million. Its variable costs are expected to be $2 million per plane. If the manufacturer wants to earn a 10 percent rate of return on its investment of $400 million and expects to produce 100 aircraft this year, what will its markup on total cost have to be? If it expects to produce 150 aircraft, what will its markup have to be?