S company manufactures pencils and packs 30 pencils in a box. The total capital investment of the company is of $10,000,000. It estimates to sell and produce 400,000 boxes next year. The target rate of return on investment is 12%. Expected costs for next year are as follows: Fixed production costs Fixed marketing and distribution costs Variable production costs Variable marketing and distribution costs Other fixed costs $400,000 S700,000 $3 per box $2 per box S500,000 S company uses full cost-plus markup method to set prices for a box in order to generate profits equal to the target return on investment. Calculate the markup percentage on full cost. (A)24% (B) 28% (C) 22% (D) 25%
S company manufactures pencils and packs 30 pencils in a box. The total capital investment of the company is of $10,000,000. It estimates to sell and produce 400,000 boxes next year. The target rate of return on investment is 12%. Expected costs for next year are as follows: Fixed production costs Fixed marketing and distribution costs Variable production costs Variable marketing and distribution costs Other fixed costs $400,000 S700,000 $3 per box $2 per box S500,000 S company uses full cost-plus markup method to set prices for a box in order to generate profits equal to the target return on investment. Calculate the markup percentage on full cost. (A)24% (B) 28% (C) 22% (D) 25%
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter13: The Balanced Scorecard: Strategic-based Control
Section: Chapter Questions
Problem 8E: Hatch Manufacturing produces multiple machine parts. The theoretical cycle time for one of its...
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