(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?_____________________ a) 48.5%b) 50.0%c) 52.5%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 thepricing for the redesigned product. The total product cost to produce the normalvolume 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 andsell the normal volume of 10,000 units is $100,000. The company uses the absorptioncosting 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%

Mark-up percentage = Mark-up amount / Total cost of the product Where, Mark-up amount = Desired…

Answered: The Presidio Company has redesigned one…

Financial And Managerial Accounting

15th Edition

ISBN:9781337902663

Author:WARREN, Carl S.

Publisher:WARREN, Carl S.

Chapter21: Variable Costing For Management analysis

Section: Chapter Questions

Problem 4CMA: Bethany Company has just completed the first month of producing a new product but has not yet...

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(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?

_____________________

a) 48.5%
b) 50.0%
c) 52.5%
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%

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