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Determine the markup percentage on variable costs

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Reference no: EM132515650

Technology Inc. predicted 2017 variable and fixed costs are as follows: Variable costs Fixed costs Manufacturing 480,000 315900 Selling and Administrative 216,000 60500 Total 696,000 376,400 Technology Inc. produces a wide variety of computer interface devices.

Per unit manufacturing cost information about one of these products, a high-capacity flash drive is as follows:

Direct material $10

Direct labor 9

Variable Manufacturing Overhead 7

Fixed Manufacturing Overhead 9

Total manufacturing costs $35

The following is the variable selling and administrative costs for the flash drive: $6

Management has set a 2017 target profit on the flash drive of: $250,000

Required:

Question 1. Determine the markup percentage on variable costs required to earn the desired profit

Question 2. Use the variable cost markup to determine a suggested selling price for a flash drive. You are determining selling price per unit

Reference no: EM132515650

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