Question

Use this information for Mallard Corporation to answer the questions that follow. Mallard Corporation uses the product cost concept of product pricing. Below is the cost information for the production and sale of 45,000 units of its sole product, Mallard desires a profit equal to 12% rate of return on invested assets of $800,000 Fixed factory overhead cost $82,000 Fixed selling and administrative costs 45,000 Variable direct materials cost per unit 5.50 Variable direct labor cost per unit 7.65 Variable factory overhead cost per unit Variable selling and administrative cost per unit 0.90 The markup percentage on product cost for the company's product is 23.4% 10.98 26.1% 18%

Answer 1

The answer is attached in below picture,

If you have any doubts or answer is not in the format as you expected, please send me a comment before rating my answer and i will clarify the doubt

Thanks

The answer us B) 10.98% of total sale price & Reason: Computation I profit marges Variable cost → Disent material cost = $5.5 + Direct labour cost = $7.65 - Factory ott cost = $2.25 - Selling & admicost = $0.90 - Total variable cost = $16.3 (x) Number of cenits sold - 45000 Total variable cost = $733500 (16.3X45000) Add: fixed costs -> Factory Oh coola - Selline e admon cost = $82000 $45000 $ 860500 Total cost (variable cost + Fixed cost Add: Profit margin $ 96000 ( Investment X127.)(800000 X127) Sale coprice meest be = $956500

Formula: Mark up Y. on product cost 29.06 | 090 X 80 Total cost - 96000 x 100 860500 = 1.15 % But in your question the rop nearest option is 10.98% o Hence that ye ansever Note: The ansever varied because of some round off differences also