The Razooks Company, which manufactures office equipment, is ready to introduce a new line of portable copiers. The following copier data are available: $$\begin{array} { l r }
\text { Variable manufacturing cost } & \$ 180 \
\text { Applied fixed manufacturing cost } & 90 \
\text { Variable selling and administrative cost } & 60 \
\text { Allocated fixed selling and administrative cost } & 75
\end{array}$$ What price will the company charge if the firm uses cost-plus pricing based on variable manufacturing cost and a markup percentage of 220%?
A) $396.00
B) $495.00
C) $576.00
D) $643.50
E) None of the other answers are correct.

Question

The Razooks Company, which manufactures office equipment, is ready to introduce a new line of portable copiers. The following copier data are available: $$\begin{array} { l r } 
\text { Variable manufacturing cost } & \$ 180 \
\text { Applied fixed manufacturing cost } & 90 \
\text { Variable selling and administrative cost } & 60 \
\text { Allocated fixed selling and administrative cost } & 75
\end{array}$$ What price will the company charge if the firm uses cost-plus pricing based on variable manufacturing cost and a markup percentage of 220%?
A) $396.00
B) $495.00
C) $576.00
D) $643.50
E) None of the other answers are correct.

Quizplus · Accepted Answer

The cost-plus pricing is calculated as: Variable manufacturing cost + (Variable manufacturing cost * Markup percentage). Here, it is $180 + ($180 * 220%) = $576.00.

The Razooks Company, Which Manufactures Office Equipment, Is Ready to Introduce