Answer:
Dotterel Corporation
The markup percentage for the sale of the company's product is:
= 45.71%.
Explanation:
a) Data and Calculations:
Production and sales units = 35,000
Desired rate of return = 11.2%
Invested assets = $350,000
Desired profit = $39,200 ($350,000 * 11.2%)
Fixed factory overhead cost = $105,000
Fixed selling and administrative costs = $35,000
Total fixed costs = $140,000 ($105,000 + $35,000)
Variable direct materials cost per unit $4.34
Variable direct labor cost per unit 5.18
Variable factory overhead cost per unit 0.98
Variable selling and administrative cost per unit 0.70
Total variable costs per unit $11.20
Total variable costs = $392,000 ($11.20 * 35,000)
Contribution margin:
Fixed costs = $140,000
Desired profits 39,200
Total = $179,200
Markup = 45.71% ($179,200/$392,000 * 100)
Sales revenue = $571,000
Selling price per unit = $16.31
