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Calculate the markup percentage

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Question - Ahmed Corporation makes a mechanical stuffed alligator. The following information is available for Ahmed Corporation's expected annual volume of 500,000 units:

 

Per Unit

Total

Direct materials 

$17

Direct labour

6

Variable manufacturing overhead 

10

Fixed manufacturing overhead 

$400,000

Variable selling and administrative expenses 

7

Fixed selling and administrative expenses 

150,000

The company has a desired ROI of 40%. It has invested assets of $25,000,000.

Using absorption-cost pricing, calculate the markup percentage.

Using variable-cost pricing, calculate the markup percentage.

Reference no: EM133113866

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