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The Sierra Company produces its product at a total cost of $1,000 per unit. Of this...

The Sierra Company produces its product at a total cost of $1,000 per unit. Of this amount, $680 is product cost and $320 is selling and administrative expenses. In addition, the total cost of $1,000 is made up of $850 variable cost and $150 fixed cost. The desired profit is $130 per unit. Determine the mark up percentage under the product cost-plus method.

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Answer #1
Mark-up percentage = (Desired profit+Selling and administrative expenses)/Product cost
=(130+320)/680= 66.18% (rounded off)
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