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Snowflake Graphics is a Chicago printing company that bids on design and printing jobs. Alison Argentine, owner, prepares the bids for most jobs. Her cost
Snowflake Graphics is a Chicago printing company that bids on design and printing jobs. Alison Argentine, owner, prepares the bids for most jobs. Her cost budget for 2019 is below:
Assume that Alison wishes to obtain a target profit of $250,000 in 2019. Calculate the markup for the following cost bases:
a. Variable production cost, assuming that labor is a variable cost
b. Total production cost
c. All costs
Why might Alison prefer one cost base over another?
Materials $ 350,000 Labor 250,000 Variable overhead 300,000 Fixed overhead 150,000 Total production cost of jobs $ 1,050,000 Variable selling and administrative expenses 75,000 Fixed selling and administrative expenses 125,000 Total costs $ 1,250,000
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