Question

Wilde Corporation budgeted the following costs for the production of its one and only product for the next fiscal​ year:

$1,140,000 785,000 Direct materials Direct labor Manufacturing overhead Variable Fixed Selling and administrative Variable Fixed Total costs 850,000 670,000 380,000 510,000 $4,335,000 Wilde has an annual target operating income of $920,000 The markup percentage for setting prices as a percentage of total manufacturing costs is O A. 212.4% O B. 52.5% O C. 41.5% OD. 78.5%

Answer 1

1140000 785000 1925000 Direct Material Direct Labour Price Cost Add: Manufacturing Overhead Variable Fixed Total Manufacturing Cost 850000 670000 3445000 920000 Target Operating Income Profit Selling And Administrative Expenses Variable Fixed Total 380000 510000 1810000 Markup % = = Target Operating Income + Selling and administrative expenses) Total Manufacturing Cost =1810000/3445000 52.5% Answer: Option A) 52.5%