The markup percentage for setting prices as a percentage of the variable cost of the product is

ACCOUNTING

Multiple Choice

Meyer Corporation budgeted the following costs for the production of its one and only product for the next fiscal year:



Direct materials $ 562,500

Direct labor 390,000

Manufacturing overhead

Variable 420,000

Fixed 322,500

Selling and administrative

Variable 180,000

Fixed 240,000

Total costs $2,115,000



Meyer has an annual target operating income of $450,000.



The markup percentage for setting prices as a percentage of the variable cost of the product is

a. 328%.

b. 36%.

c. 228%.

d. 65%.

Click here for the SOLUTION