8-3

Computing Markups The predicted 2009 costs for Osaka Motors are as follows:

Manufacturing Costs		Selling and Administrative Costs
Variable	$100,000	Variable	$300,000
Fixed	230,000	Fixed	200,000

Average total assets for 2009 are predicted to be $4,000,000. (a) If management desires a 11 percent rate of return on total assets, what are the markup percentages for total variable costs and for total manufacturing costs? (Round your answers to the nearest whole percent.) Markup on variable costs Answer

% Markup on manufacturing costs Answer % (b) If the company desires a 9 percent rate of return on total assets, what is the markup percentage on total manufacturing costs for (1) unassigned costs and (2) desired profit? (Round your answers to the nearest whole percent.) Markup to cover unassigned costs Answer % Markup to cover desired profit Answer %