Monty's has one product with a variable cost of $19.80 and a cost of goods sold per unit of $18.32.If Monty sells this product for $24.75, what is Monty's markup percentage based on variable cost per unit and based on cost of goods sold?

Question

Quizplus · Accepted Answer

Based on variable cost per unit:
Markup percentage = (Selling price - Variable cost per unit) / Variable cost per unit x 100%
= ($24.75 - $19.80) / $19.80 x 100%
= 25%

Based on cost of goods sold:
Markup percentage = (Selling price - Cost of goods sold per unit) / Cost of goods sold per unit x 100%
= ($24.75 - $18.32) / $18.32 x 100%
= 35%

Monty's Has One Product with a Variable Cost of $19