Kulvekowski Company has budgeted sales of $30,000 with the following budgeted costs:
$$\begin{array} { l l }
\text { Direct materials } & \$ 6,300 \
\text { Direct labor } & \$ 4,100 \
\text { Variable factory overhead } & \$ 3,700 \
\text { Fixed factory overhead } & \$ 5,600 \
\text { Variable selling and administrative costs } & \$ 2,400 \
\text { Fixed selling and administrative costs } & \$ 3,200
\end{array}$$
What is the average target markup percentage for setting prices as a percentage of total costs?
A) 15.7%
B) 18.6%
C) 20.1%
D) none of the above

Question

Kulvekowski Company has budgeted sales of $30,000 with the following budgeted costs:
$$\begin{array} { l l } 
\text { Direct materials } & \$ 6,300 \
\text { Direct labor } & \$ 4,100 \
\text { Variable factory overhead } & \$ 3,700 \
\text { Fixed factory overhead } & \$ 5,600 \
\text { Variable selling and administrative costs } & \$ 2,400 \
\text { Fixed selling and administrative costs } & \$ 3,200
\end{array}$$
What is the average target markup percentage for setting prices as a percentage of total costs?
A) 15.7%
B) 18.6%
C) 20.1%
D) none of the above

Quizplus · Accepted Answer

The total costs are $25,300 ($6,300 + $4,100 + $3,700 + $5,600 + $2,400 + $3,200). The markup is $4,700 ($30,000 - $25,300). The markup percentage is ($4,700 / $25,300) * 100 = 18.6%.

Kulvekowski Company Has Budgeted Sales of $30,000 with the Following