Harmon Co. produces a variety of golfing equipment. In the past, product managers set prices using their professional judgment.

Jerry, the new controller, believes this practice has led prices to be significant underpriced for certain products and other products to be overpriced, which has led to lost sales in the latter case.

You have been asked to assist Jerry in developing a corporate approach to pricing. The output of your work should be a cost-based formula that can be used to develop initial selling prices for each product.

Although product managers are allowed to adjust these prices to meet competition and to take advantage of market opportunities, they must explain such deviations in writing.

The following 2017 cost information from the accounting records are available:

Manufacturing costs

Selling and Administrative costs

Variable

$350,000

$75,000

Fixed

100,000

200,000

In 2017, Harmon Co. reported earnings of $120,000. However, the controller believes the proper pricing should produce earnings of at least $150,000 on the same sales mix and unit volume.

Accordingly you are to use the preceding cost information and the target profit of $150,000 in developing a cost-based formula. Target profit:

$150,000

Selling and administrative expenses are not currently associated with individual products.

However, you have obtained the following unit production cost information for the Tommy Irons:

Variable manufacturing costs

$150

Fixed Manufacturing costs

50

Total

$200

Required: Determine the standard markup percentage for each of the following cost bases round percentage answers to two decimal places.

1-Full costs, including fixed and variable manufacturing costs, and fixed and variable selling and administrative costs.

2- Manufacturing costs.

3- Manufacturing costs plus variable selling and administrative costs.