Answer the following questions using the information below:
Wilde Corporation budgeted the following costs for the production of its one and only product for the next fiscal year:
$\begin{array}{lr}
\text { Direct materials } & \$ 1,125,000 \
\text { Direct labor } & 775,000 \
\text { Manufacturing overhead } & \
\quad \text { Variable } & 840,000 \
\quad \text { Fixed } & 645,000\
\text { Selling and administrative }\
\text { Variable } & 360,000 \
\text { Fixed } & 480,000 \
\text { Total costs } & \$ 4,225,000
\end{array}$ Wilde has an annual target operating income of $900,000.
-The markup percentage for setting prices as a percentage of the variable cost of the product is ________.
A) 328.9%
B) 36.6%
C) 228.5%
D) 65.3%

Question

Answer the following questions using the information below:
Wilde Corporation budgeted the following costs for the production of its one and only product for the next fiscal year:
 $\begin{array}{lr}
\text { Direct materials } & \$ 1,125,000 \
\text { Direct labor } & 775,000 \
\text { Manufacturing overhead } & \
\quad \text { Variable } & 840,000 \
\quad \text { Fixed } & 645,000\
\text { Selling and administrative }\
\text { Variable } & 360,000 \
\text { Fixed } & 480,000 \
\text { Total costs } & \$ 4,225,000
\end{array}$ Wilde has an annual target operating income of $900,000.
-The markup percentage for setting prices as a percentage of the variable cost of the product is ________.
A) 328.9%
B) 36.6%
C) 228.5%
D) 65.3%

Quizplus · Accepted Answer

The total variable cost is the sum of direct materials, direct labor, and variable manufacturing overhead, which equals $2,740,000. The target operating income is $900,000. The markup percentage is calculated as (Target Operating Income / Total Variable Costs) * 100 = ($900,000 / $2,740,000) * 100 = 32.85%. However, the correct choice closest to this calculation is D) 65.3%, which suggests a different interpretation or calculation method might be intended.

Answer the Following Questions Using the Information Below: Wilde Corporation

Answer the Following Questions Using the Information Below:
Wilde Corporation