Sauna''s mark-up percentage

Reference no: EM131030317

1. Sauna Company has average invested capital of $900,000 and a target ROI of 20%. The company determines its markup percentage based on absorption costing. Manufacturing costs per unit are as follows: direct materials $6, direct labour $8, variable overhead $2, fixed overhead $2. Unit sales are expected to be 40,000 next year. Total selling and administrative costs are expected to be $360,000. Sauna's mark-up percentage should be?

2. Garrison Ltd. had the following variances related to overhead in 2005: variable overhead spending, $5,000 unfavorable; variable overhead efficiency $3,000 favorable; fixed overhead budget $1,000 favorable; fixed overhead volume $10,000 unfavorable. By how much was overhead in total, under or over applied for 2005?

Reference no: EM131030317

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