MycroFiber is a producer of microfiber material for the auto detailing industry. Jamal, the owner of MycroFiber is highly skilled in the technical and manufacturing areas, but does not understand pricing. Jamal knows he wants to cover the cost of production when selling his material and needs revenue to cover his overhead costs and to make a profit. To be sure he meets these goals, Jamal decides to take a cost-based pricing approach and use a 50% markup percentage. If MycroFiber's cost of production is $4 a square yard, Jamal will price his material at:
A) $6 a square yard.
B) $2 a square yard.
C) $4 a square yard.
D) $8 a square yard.

Question

Quizplus · Accepted Answer

With a cost of production at $4 a square yard and a 50% markup, Jamal will add $2 (50% of $4) to the cost, pricing the material at $6 a square yard.

MycroFiber Is a Producer of Microfiber Material for the Auto