The following is cost and production data for the Wave Darter: ...
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Accounting
The following is cost and production data for the Wave Darter:
| Per unit | ||||||
| Variable manufacturing cost | $ | 390 | ||||
| Applied fixed manufacturing cost | 270 | * | ||||
| Absorption manufacturing cost | 660 | |||||
| Variable selling and administrative cost | 58 | |||||
| Allocated fixed selling and administrative cost | 120 | |||||
| Total cost | $ | 838 | ||||
| Variable manufacturing cost | $ | 390 | ||||
| Variable selling and administrative cost | 58 | |||||
| Total variable cost | $ | 448 | ||||
*Based on planned monthly production of 42 units (or 504 units per year).
Rounded
The target profit is $41,000, with planned sales equal to production.
Question: Use the general formula for determining a markup percentage to compute the required markup percentage using absorption manufacturing cost.
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