Computing Markups

The predicted 2009 costs for Osaka Motors are as follows:

Manufacturing Costs: Variable: $100,000 and Fixed: $220,000

Selling and Administrative Costs: Variable: $300,000 and Fixed: $220,000

Average total assets for 2009 are predicted to be $7,000,000.

(a) If management desires a 13 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

_%

Markup on 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? (Round your answers to the nearest whole percent.)

Markup to cover unassigned costs

_%

Markup to cover desired profit

_%