Managerial Accounting: The Cornerstone of Business Decision-Making
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN: 9781337115773
Author: Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher: Cengage Learning
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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%
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Transcribed Image Text: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%
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