Computing Markups (LO2)

The predicted 2012 costs for Osaka Motors are as follows:

Manufacturing Costs Selling and Administrative Costs Mana DilGe nee cccrctesscamistras $100,000 Variables cr Aace te awesctae $300,000 BoDG I Bp were eanyc uca ray site 220,000 A219 Rommeonieer chnc eceec e,ren i es 200,000 Average total assets for 2012 are predicted to be $6,000,000.

Required

a. If management desires a 12 percent rate of return on total assets, what are the markup percentages based on total variable costs and based on total manufacturing costs?

b. If the company desires a 10 percent rate of return on total assets, what is the markup percentage on total manufacturing costs for (1) unassigned costs and (2) desired profit?

 LO.1