Answer:
96.60%
Explanation:
Total Variable Cost = Variable product cost + Variable administrative cost per unit
= (5,000 × $79 per unit) + (5,000 × $21 per unit)
= $395,000 + $105,000
= $500,000
Total Fixed Cost = Total fixed overhead + Total fixed Administrative Cost
= $42,000 + $31,000
= $73,000
Total fixed cost per unit = $73,000 ÷ 5,000
= 14.6
Total Cost = Total Variable Cost + Total Fixed Cost
= $500,000 + $73,000
= $573,000
Target profit = 5,000 × $82
= $410,000
Desired Selling Price = Total cost + Target profit
= $573,000 + $410,000
= $983,000
Desired Selling Price per unit = $983,000 ÷ 5,000
= $196.6
Therefore,
Mark up percentage on Variable Cost
:
= (Desired Selling Price per unit – Variable Cost per unit) ÷ (Variable Cost per unit) × 100
= [(196.60 – 100) ÷ (100)] × 100
= 96.60%
