Answer:
Explanation:
Computation A:
Product Cost Markup = Desire to Earn Profit + Total Selling
Desired to Earn profit = $960,000 × 12%
Desired to Earn profit = $115,200
Product Cost Markup = Desire to Earn Profit + Total Selling
Product Cost Markup = $115200 + $105000
Product Cost Markup = $220,200
Percentage Markup = Product Cost Markup / Incur Total Manufacturing Cost
Percentage Markup = $220200 / $2600000
Percentage Markup = 8.5%
Computation B:
Per Unit Cost = $2,600,000 / 80000
Per Unit Cost = $32.5
Price of Product = $32.5 + ($32.5 × 8.5%)
Price of Product = $35.26
