Computing Markups The predicted 2009 costs for Osaka Motors are as follows: Manufacturing Costs Selling and Administrative Costs Variable $100,000 Variable $300,000 Fixed 220,000 Fixed 200,000 Average total assets for 2009 are predicted to be $ 6,000,000. (a) If management desires a 13 percent rate of return on total assets, what are the markup percentages for total variable costs and for total manufacturing costs? (Round your answers to the nearest whole percent.) Markup on variable costs Answer 1 300% Markup on manufacturing costs Answer 2 400 % (b) If the company desires a 7 percent rate of return on total assets, what is the markup percentage on total manufacturing costs for (1) unassigned costs and (2) desired profit? Note: The markup percentage on total manufacturing costs is 287%. Compute the markup percentage for each component. Note: Round your answers to the nearest whole percent. Markup to cover unassigned costs Answer 3 156 % Markup to cover desired profit Answer 4 219%

Computing Markups The predicted 2009 costs for Osaka Motors are as follows: Manufacturing Costs Selling and Administrative Costs Variable $100,000 Variable $300,000 Fixed 220,000 Fixed 200,000 Average total assets for 2009 are predicted to be $ 6,000,000. (a) If management desires a 13 percent rate of return on total assets, what are the markup percentages for total variable costs and for total manufacturing costs? (Round your answers to the nearest whole percent.) Markup on variable costs Answer 1 300% Markup on manufacturing costs Answer 2 400 % (b) If the company desires a 7 percent rate of return on total assets, what is the markup percentage on total manufacturing costs for (1) unassigned costs and (2) desired profit? Note: The markup percentage on total manufacturing costs is 287%. Compute the markup percentage for each component. Note: Round your answers to the nearest whole percent. Markup to cover unassigned costs Answer 3 156 % Markup to cover desired profit Answer 4 219%

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter7: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 42E: Sales Revenue Approach, Variable Cost Ratio, Contribution Margin Ratio Arberg Companys controller...

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