The following costs relate to Southern Company: Variable manufacturing cost, $30; variable selling and administrative cost, $8; applied fixed manufacturing overhead, $15; and allocated fixed selling and administrative cost, $4. If Southern uses total-cost pricing formulas, the company's markup percentage would be computed on the basis of:
A) $30.
B) $38.
C) $45.
D) $57.
E) none of the other answers are correct.

Question

Quizplus · Accepted Answer

Total-cost pricing includes all variable and fixed costs. Here, it includes variable manufacturing cost ($30), variable selling and administrative cost ($8), applied fixed manufacturing overhead ($15), and allocated fixed selling and administrative cost ($4), totaling $57.

The Following Costs Relate to Southern Company: Variable Manufacturing Cost