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Compute a markup percentage based on variable costs concepts

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Question

Kirk Co. manufactures mobile cellular equipment and develops a price for the product by using a variable cost concept. Kirk incurs variable costs of $1,900,000 in the production of 100,000 units. Fixed costs total $50,000. The company employs $4,725,000 of assets and wishes to earn a profit equal to a 10% rate of return on assets.

a. Compute a markup percentage based on the variable costs concept. Round your answer to one decimal place.

b. Determine a selling price. Round your answer to two decimal places.

Reference no: EM132380643

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