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fenil 12 April 2020 at 17:06 PM
ACB Inc. produces a product called Zite. The following cost information is available with respect to Zite on a per unit basis: direct materials, $5; direct labor, $4; variable manufacturing overhead, $2; variable marketing, $2; fixed manufacturing, $4; fixed marketing $2. If ACB wants to earn a 55% markup on the variable cost, what is the amount of the markup? a) $5.50 b) $7.15 c) $8.25 d) $9.35
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FACULTY 09 May 2020 at 01:15 PM
So mark up is 55% based on variable cost
variable cost = direct material +direct labor+variable manufacturing overhead+variable marketing cost
=5+4+2+2
= 13
so mark up amount is 55% of 13 = 7.15 (option B)
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