A manufacturing company produces and sells 40,000 buckets.At this level of activity, variable costs total $80,000 and fixed costs total $120,000.If each bucket is sold for $8, what markup percentage is the company using?

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Quizplus · Accepted Answer

The cost per bucket is ($80,000 variable + $120,000 fixed) / 40,000 buckets = $5. The selling price is $8, so the markup is ($8 - $5) / $5 = 60%.

A Manufacturing Company Produces and Sells 40,000 Buckets