Exercise 9.31 a-b

Ahmed Corporation makes a mechanical stuffed alligator. The following information is available for Ahmed Corporations expected annual volume of 500,000 units:

		Per Unit		Total
Direct materials		$15
Direct labour		9
Variable manufacturing overhead		12
Fixed manufacturing overhead				$400,000
Variable selling and administrative expenses		4
Fixed selling and administrative expenses				150,000

The company has a desired ROI of 40%. It has invested assets of $22,400,000.

Using absorption-cost pricing, calculate the markup percentage. (Round answer to 2 decimal places, e.g. 15.25%.)

Markup percentage

%

Using variable-cost pricing, calculate the markup percentage. (Round answer to 2 decimal places, e.g. 15.25%.)

Markup percentage

%