Question

Ahmed Corporation makes a mechanical stuffed alligator. The following information is available for Ahmed Corporation's expected annual volume of 500,000 units: Per Unit Total $14 una Direct materials Direct labour Variable manufacturing overhead Fixed manufacturing overhead Variable selling and administrative expenses Fixed selling and administrative expenses $400,000 5 130,000 The company has a desired ROI of 40%. It has invested assets of $24,700,000. Using absorption-cost pricing, calculate the markup percentage. (Round answer to 2 decimal places, e.g. 15.25%.) Markup percentage Using variable-cost pricing, calculate the markup percentage. (Round answer to 2 decimal places, e.g. 15.25%.) Markup percentage

Answer 1

on Mark-up Celling percentage Controll i S 2 Cortinanood boro We need to find selling price first. 1 thing absorption Coet pricing - Inverted auets a 124,700,000 ROTUD YOX. 1 Return on Investment = $9880000 1024,700,000 X Yo% fuld Estimated sales volume = 500000 unite! ROI per unit - $98800bo al 26 500,000 units - $19.76 ser unit Total Cent per unit as per alsoestion. Casting -

Direct Material t t 1 14 + Direct labour 86 + variable Manufacturing duerhead (15 + Fred Manufacturing Querhead = $0.8 per unit ( 1 Yooooo L 500ooo unite Cont per unit = $35.80 Estimated selling price per unit Cost per unit = 4 35.80 ROT per unit = 19.76 - $55.56 Mark up percentage under Aborsron + 1 Cat pricing $ 155.56-135.80 X 100 aucoooo & 35.80 = 1 55.207.

A percentage lark up ming Variable Cest pricing - Cost per unit under variable Cast pricing - Direct Material = $14 Direct Labour Variable Manufacturing duer head 135 Estimated Cost ROI per per Selling Unit unit price per Unit - 135 = 119.76 $54.76 + - Mark up percentage = 0 $54.76'-'35 X 100 I 35 = 56.46 y. u