Question

Light Force Inc. produces and sells lighting fixtures. An entry light has a total cost of $180 per unit, of which $100 is product cost and $80 is selling and administrative expenses. In addition, the total cost of $180 is made up of $110 variable cost and $70 fixed cost. The desired profit is $45 per unit.
1. Determine the markup percentage on product cost. Round the answer to nearest whole number.

Answer 1

Answer:

Total mark up= 45%

Explanation:

Giving the following information:

An entry light has a total cost of $180 per unit, of which $100 is product cost and $80 is selling and administrative expenses. Also, the total cost of $180 is made up of $110 variable cost and $70 fixed cost. The desired profit is $45 per unit.

If $100 is the product cost, and $45 is the desired mark up:

100=100%

45= ?  = (45/100)= 0.45= 45%