Question
Computing Markups The predicted annual costs for Mighty Motors are as follows: Manufacturing Costs Selling and Administrative Costs Variable $ 250,000 Variable $250,000 Fixed 350,000
Computing Markups The predicted annual costs for Mighty Motors are as follows:
Manufacturing Costs | Selling and Administrative Costs | ||
---|---|---|---|
Variable | $ 250,000 | Variable | $250,000 |
Fixed | 350,000 | Fixed | 550,000 |
Average total assets for the year are predicted to be $7,500,000.
(a) If management desires a 10% rate of return on total assets, what are the markup percentages for total variable costs and for total manufacturing costs? (Round your answer to the nearest whole percent.)
Markup on variable costs: Answer %
Markup on manufacturing costs: Answer %
(b) If the company desires a 8% rate of return on total assets, what is the markup percentage on total manufacturing costs for (1) unassigned costs and (2) desired profit?
Note: The markup percentage on total manufacturing costs is 233%. Compute the markup percentage for each component. Note: Round your answers to the nearest whole percent.
Markup to cover unassigned costs: Answer % Markup to cover desired profit: Answer %
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