Business, 05.05.2020 18:41 sophie5064

AST Electrical provides the following cost information related to its production of electronic circuit boards. Per Unit Variable manufacturing cost $40 Fixed manufacturing cost $30 Variable selling and administrative expenses $ 8 Fixed selling and administrative expenses $12 Desired ROI per unit $15 What is its markup percentage assuming that AST Electrical uses absorption- cost pricing? 16.67%. 54.28%. 50%. 118.75%.

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In accounting and managerial cost work the amount that is equal to the difference in selling and cost price of a product is called markup percentage.

The formula of markup percentage is :

$\beginalign\rm Markup \:Percentage = \dfrac{Selling \: Price - Cost}{Cost} \times100\endalign$

The markup percentage is:

Option C. 50%

The markup percentage can be estimated as:

Given,

Per Unit Variable manufacturing cost = $40Fixed manufacturing cost = $30Variable selling and administrative expenses (VA) = $ 8 Fixed selling and administrative expenses (FA) = $12 ROI per unit = $15

$\beginalign\text{Unit Product Cost as per absorption Costing} = \text{Variable Manufacturing cost } + \text{Fixed manufacturing cost} \\\\= \$40 + \$30\\\\= \$70\endalign$

To achieve the desired ROI:

$\text{Desired ROI per unit} & = \text{VA} + \text{FA} + \text{Desired ROI per unit}\\\\\\= \$8 + \$12 + \$15\\\\\\= \$35$

Markup percentage can be calculated as:

$\rm Mark \;up \;percentage = \dfrac{Mark \;up \;needed }{ Unit\; Product\; Cost\; as\; per\; absorption\; Costing} \times100\\\\\\= \dfrac{\$35 }{\$70} \times100\\\\\\= 50\%$

Therefore, 50% of the markup percentage is used.

To learn more about markup percentage follow the link:

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Answer from: NobleWho

50%

Explanation:

The computation of markup percentage is shown below:-

Unit Product Cost as per absorption Costing = Variable Manufacturing cost + Fixed manufacturing cost

= $40 + $30

= $70

Mark up needed to achieve Desired ROI per unit = Variable selling and administrative expenses + Fixed selling and administrative expenses + Desired ROI per unit

= $8 + $12 + $15

= $35

Mark up percentage = Mark up needed ÷ Unit Product Cost as per absorption Costing

= $35 ÷ $70

= 50%

So, for computing the markup percentage we simply applied the above formula.

Answer from: Quest

answer: in the short-run firms will respond by raising the price of turkey.

explanation: initially the long-run equilibrium is at a price of $5 per pound of turkey and a quantity of 50 million pounds per year. now, when webmd claims that a protein found in turkey will increase your expected lifespan by 4 years. the consumers demand for turkey will increase at every price shifting the demand curve to the right from d1 to d2. while, there will be no change in the supply curve in the short-run as it is not possible for producers to adjust supply so quickly. as a result the new equilibrium will occur at a higher price and a higher quantity of turkey.

thus, in the short run firms will respond by increasing the price of turkey, selling more quantity at a higher price and earning economic profits.

Answer from: Quest

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