Question

Assume mark-up percentage equals desired profit divided by total costs. What is the correct calculation to determine the dollar amount of the mark-up per unit?A. Total cost per unit divided by mar-kup percentage per unit.B. Mark-up percentage divided by total cost.C. Total cost per unit times mark-up percentage per unit.D. Mark-up percentage per unit divided by total cost per unit.E. Total cost times mark-up percentage.

Answer 1

Answer:

C. Total cost per unit times mark-up percentage per unit

Explanation:

The mark-up percentage is assumed to be computed by dividing the desired profit by the total cost.

The dollar amount of the mark-up per unit shall be computed by multiplying the total cost per unit with the markup percentage per unit.

The selling price of the product can be computed by adding the mark-up per unit to the cost price of each unit.