Hershey, Inc. sells a single product. The following information relates to the year just ended:
Number of units sold: 40,000
Variable cost per unit: $200
Total fixed cost: $2,400,000
Operating income: $3,800,000
Required:
A. Compute the company's selling price.
B. Compute the percentage markup on total cost. Round your answer to two decimal places.
C. Assume that Hershey desired to change its practice of computing a markup on total cost to a markup on variable cost. If the company wants to hold selling price constant, would the markup percentage increase or decrease? By how much?

Question

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The Answer of Hershey, Inc. sells a single product. The following information relates to the year just ended:
Number of units sold: 40,000
Variable cost per unit: $200
Total fixed cost: $2,400,000
Operating income: $3,800,000
Required:
A. Compute the company's selling price.
B. Compute the percentage markup on total cost. Round your answer to two decimal places.
C. Assume that Hershey desired to change its practice of computing a markup on total cost to a markup on variable cost. If the company wants to hold selling price constant, would the markup percentage increase or decrease? By how much?