Goshawks Co. produces an automotive product and incurs total manufacturing costs of $2,600,000 in the production of 80,000 units. The company desires to earn a profit equal to a 12% rate of return on assets of $960,000. Total selling and administrative expenses are $105,000.
(a) Calculate the markup percentage, using the product cost concept.
(b) Compute the selling price per unit of the automotive product.
Round your markup percentage to one decimal place, and other intermediate calculations and final answer to two decimal places.

Question

Goshawks Co. produces an automotive product and incurs total manufacturing costs of $2,600,000 in the production of 80,000 units. The company desires to earn a profit equal to a 12% rate of return on assets of $960,000. Total selling and administrative expenses are $105,000. 
(a) Calculate the markup percentage, using the product cost concept. 
(b) Compute the selling price per unit of the automotive product. 
Round your markup percentage to one decimal place, and other intermediate calculations and final answer to two decimal places.

Quizplus · Accepted Answer

The Answer of Goshawks Co. produces an automotive product and incurs total manufacturing costs of $2,600,000 in the production of 80,000 units. The company desires to earn a profit equal to a 12% rate of return on assets of $960,000. Total selling and administrative expenses are $105,000. 
(a) Calculate the markup percentage, using the product cost concept. 
(b) Compute the selling price per unit of the automotive product. 
Round your markup percentage to one decimal place, and other intermediate calculations and final answer to two decimal places.