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Computing Markups

The predicted 2009 costs for Osaka Motors are as follows:

Manufacturing Costs Selling and Administrative Costs

Variable $100,000 Variable $300,000

Fixed $230,000 Fixed $200,000

Average total assets for 2009 are predicted to be $8,000,000.

(a) If management desires a 11 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 cost _____ %

(b) If the company desires a 8 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 _____ %