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 total variable cost and a markup percentage of 160%?
A) $150.
B) $384.
C) $390.
D) $624.
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 total variable cost and a markup percentage of 160%?
A) $150.
B) $384.
C) $390.
D) $624.
E) None of the other answers are correct.

Quizplus · Accepted Answer

The total variable cost is $180 (manufacturing) + $60 (selling and administrative) = $240. The markup is 160% of $240, which is $384. Therefore, the price is $240 + $384 = $624.

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