Partridge Co.has produced a product with a total unit cost of $60 and a desired ROI per unit of $25.If Partridge Co.'s target selling price is $85, what is its percentage markup on cost?
A)141.67%
B)100%
C)50%
D)41.67%

Question

Quizplus · Accepted Answer

First, calculate the selling price: 
Selling price = total unit cost + desired ROI per unit 
Selling price = $60 + $25 = $85

Then, calculate the markup on cost: 
Markup on cost = (selling price - total unit cost) / total unit cost 
Markup on cost = ($85 - $60) / $60 = 0.4167 or 41.67%

Therefore, the best choice is D, with a markup on cost of 41.67%.