FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
Bartleby Related Questions Icon

Related questions

Question
100%

(Original question included in the attached image)

The Presidio Company has redesigned one of its products and is deciding on the pricing for the redesigned product. The total product cost to produce the normal volume of 10,000 units is $200,000. Total selling costs are estimated to be $80,000. The target return on investment is 25% and annual investment required to make and sell the normal volume of 10,000 units is $100,000. The company uses the absorption costing approach to compute the mark-up percentage when setting the target price. What is the mark-up percentage?

_____________________ 

  1. a) 48.5%

  2. b) 50.0%

  3. c) 52.5%

  4. d) 90.0%

_____________________

I got "C" as my final answer for this question, but just want to make sure it is correct. 

The Presidio Company has redesigned one of its products and is deciding on the
pricing for the redesigned product. The total product cost to produce the normal
volume of 10,000 units is $200,000. Total selling costs are estimated to be $80,000.
The target return on investment is 25% and annual investment required to make and
sell the normal volume of 10,000 units is $100,000. The company uses the absorption
costing approach to compute the mark-up percentage when setting the target price.
What is the mark-up percentage?
a) 48.5%
b) 50.0%
c) 52.5%
d) 90.0%
expand button
Transcribed Image Text:The Presidio Company has redesigned one of its products and is deciding on the pricing for the redesigned product. The total product cost to produce the normal volume of 10,000 units is $200,000. Total selling costs are estimated to be $80,000. The target return on investment is 25% and annual investment required to make and sell the normal volume of 10,000 units is $100,000. The company uses the absorption costing approach to compute the mark-up percentage when setting the target price. What is the mark-up percentage? a) 48.5% b) 50.0% c) 52.5% d) 90.0%
Expert Solution
Check Mark
Knowledge Booster
Background pattern image
Accounting
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
Recommended textbooks for you
Text book image
FINANCIAL ACCOUNTING
Accounting
ISBN:9781259964947
Author:Libby
Publisher:MCG
Text book image
Accounting
Accounting
ISBN:9781337272094
Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:Cengage Learning,
Text book image
Accounting Information Systems
Accounting
ISBN:9781337619202
Author:Hall, James A.
Publisher:Cengage Learning,
Text book image
Horngren's Cost Accounting: A Managerial Emphasis...
Accounting
ISBN:9780134475585
Author:Srikant M. Datar, Madhav V. Rajan
Publisher:PEARSON
Text book image
Intermediate Accounting
Accounting
ISBN:9781259722660
Author:J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:McGraw-Hill Education
Text book image
Financial and Managerial Accounting
Accounting
ISBN:9781259726705
Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:McGraw-Hill Education