Question

9. Oriole Company has gathered the following information concerning one model of shoe:

Variable manufacturing costs	$32000
Variable selling and administrative costs	$28000
Fixed manufacturing costs	$160000
Fixed selling and administrative costs	$120000
Investment	$1700000
ROI	30%
Planned production and sales	5000 pairs

What is the markup percentage?

850%

150%

266%

182%

10. Bramble Corp. has received a shipment of suits that cost $330 each. If the company uses cost-plus pricing and applies a markup percentage of 60%, what is the sales price per suit?

$280

$825

$528

$550

14. The following data is available for Marigold Repair Shop for 2019:

Repair technicians’ wages	$360000
Fringe benefits	70000
Overhead	50000
Total	$480000

The desired profit margin is $38 per labor hour. The material loading charge is 40% of invoice cost. It is estimated that 5000 labor hours will be worked in 2019.

In January 2019, Marigold repairs a bicycle that uses parts of $240. Its material loading charge on this repair would be

$144.

$96.

$268.

$134.

Please answer all 3 questions. Thank you!

Answer 1

Solution 1

Markup percentage = b) 150%

Variable manufacturing costs	$32,000
Add: Variable selling and administrative costs	$28,000
Add: Fixed manufacturing costs	$160,000
Add: Fixed selling and administrative costs	$120,000
Total Costs	$340,000
Add: Desired Profit ($1,700,000*30/100)	$510,000
Total Sales Revenue	$850,000
Number of Units sold	5,000

= 510,000/340,000 x 100 = 150%

Solution 2

Correct answer is c) $528

Cost Price = $330

Markup percentage = 60%

Sale Price $330 * 160 % = $528

Solution 3

Correct answer is b) $96

Cost of parts = $ 240

Material handling charge = 40% of invoice = 40% of 240 = $ 96

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