Moon Company uses the variable cost method of applying the cost-plus approach to product pricing. The costs and expenses of producing and selling 75,000 units of Product T are as follows:Variable costs per unit: Direct materials$ 7.00 Direct labor3.50 Factory overhead1.50 Selling and administrative expenses3.00 Total$15.00Fixed costs:Line Item DescriptionAmount Factory overhead$45,000 Selling and administrative expenses20,000Moon desires a profit equal to an 18% return on invested assets of $1,440,000. c. Determine the markup percentage for Product T. Round your answer to one decimal place.fill in the blank 1 of 1%

Variable costs are those costs which changes along with change in activity level. Markup is added to…

Answered: Variable costs per unit: Direct…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Moon Company uses the variable cost method of applying the cost-plus approach to product pricing. The costs and expenses of producing and selling 75,000 units of Product T are as follows:

Variable costs per unit:

Direct materials	$ 7.00
Direct labor	3.50
Factory overhead	1.50
Selling and administrative expenses	3.00
Total	$15.00

Fixed costs:

Line Item Description	Amount
Factory overhead	$45,000
Selling and administrative expenses	20,000

Moon desires a profit equal to an 18% return on invested assets of $1,440,000.

c. Determine the markup percentage for Product T. Round your answer to one decimal place.
fill in the blank 1 of 1%

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