The following per unit information is available for a new
product of Coronado Industries:
Desired ROI | $29 |
Fixed cost | 56 |
Variable cost | 60 |
Total cost | 116 |
Selling price | 145 |
Coronado Industries’s markup percentage would be
Answer)
Calculation of markup percentage
Since markup is based on the desired Return on Investment, it will be calculated by dividing the desired Return on Investment by the total cost.
Markup percentage = Desired ROI/ Total cost
= $ 29/ $ 116
= 25%
Therefore markup is 25% of total cost.
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