Question

The Gargus Company, which manufactures projection equipment, is ready to introduce a new line of portable projectors. The following data are available for a proposed model: Variable manufacturing costs 270 Applied fixed manufacturing overhead 135 Variable selling and administrative costs 90 Applied fixed selling and administrative costs 105 What price will the company charge if the firm uses cost-plus pricing based on variable manufacturing cost and a markup percentage of 200%

Answer 1

$810

Step-by-step explanation:

The computation of the price that charge by the company is as follows:

As we know that

Markup percentage = 100 × (sales price - cost) ÷ (cost)

As the cost is depend upon variable manufacturing cost only

so cost would be $270

Now

markup percentage = 100 × (sales price - $270) ÷ 270

200 × $270 = 100 × (sales price - $270)

sales price = $270 + $540

= $810