Asked by Reyna Nava Sanchez on Jul 11, 2024
Verified
Goshawks Co. produces an automotive product and incurs total manufacturing costs of $2,600,000 in the production of 80,000 units. The company desires to earn a profit equal to a 12% rate of return on assets of $960,000. Total selling and administrative expenses are $105,000.
(a)Calculate the markup percentage, using the product cost concept.
(b)Compute the selling price per unit of the automotive product.Round the markup percentage to one decimal place, and other intermediate calculations and final answer to two decimal places.
Markup Percentage
The percentage increase between the cost to produce or purchase a product and its selling price.
Product Cost Concept
An accounting approach that includes costs directly associated with manufacturing a product, including raw materials, labor, and overhead expenses.
Manufacturing Costs
The total expenses involved in making a product, including direct materials, direct labor, and factory overhead.
- Learn about the cost-plus approach in product pricing and the determination of markup percentages.
Verified Answer
AG
Learning Objectives
- Learn about the cost-plus approach in product pricing and the determination of markup percentages.