Question

Jamison Company uses the total cost method of applying the cost-plus approach to product pricing. Jamison produces and sells Product X at a total cost of $1,000 per unit, of which $680 is product cost and $320 is selling and administrative expenses. In addition, the total cost of $1,000 is made up of $570 variable cost and $430 fixed cost. The desired profit is $200 per unit.

Required:
Determine the markup percentage on total cost.

Answer 1

the markup percentage on total cost is 20 %

Step-by-step explanation:

Mark up = Profit / Total Cost x 100

where,

Total Cost = $1,000

Profit = $200

therefore,

Mark up = $200 / $1,000 x 100 = 20 %

thus,

the markup percentage on total cost is 20 %