The predicted 2017 costs for Mighty Motors are as follows:

Average total assets for 2017 are predicted to be $7,000,000.

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?

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Variable.. Fixed... Manufacturing Costs Selling and Administrative Costs $200,000 Variable... 400,000 Fixed.. $600,000 300,000