Question

Stanley Corporation manufactures an electronic switch for dishwashers. The cost base per unit, excluding selling and administrative expenses, is $60. The per unit cost of selling and administrative expenses is $15. The company’s desired ROI per unit is $6. Calculate its markup percentage on total unit cost.

Answer 1

Answer:

So markup percentage will be 8 % on total unit cost

Explanation:

We have given that cost base per unit including selling and  administrative expenses is $60

per unit cost of selling and and administrative expenses is $15

The company desired ROI per unit is $6

We have to calculate the markup percentage on total unit cost

Markup percentage on total unit cost is given by '

markup percentage = $\frac{desired\ ROI}{cost\ base\ per\ unit+ The \ per\ unit \ cost \ of \ selling \ and \ administrative\ expense}=\frac{6}{60+15}=0.08=8%$  

So markup percentage will be 8 % on total unit cost