Tootsie Manufacturing Company has the following budgeted costs for 10,000 units:
$$\begin{array} { l c c }
&\underline{\text { Variable Costs }}&\underline{\text { Fixed Costs }}\
\text { Manufacturing } & \$ 100,000 & \$ 50,000 \
\text { Selling \& Administrative } & \underline{50,000} & \underline{12,500} \
\text { Total } & \$ 150,000 & \$ 62,500
\end{array}$$ What is the markup on fixed costs needed to obtain a target profit of $75,000?

Question

Tootsie Manufacturing Company has the following budgeted costs for 10,000 units:
$$\begin{array} { l c c } 
&\underline{\text { Variable Costs }}&\underline{\text { Fixed Costs }}\
\text { Manufacturing } & \$ 100,000 & \$ 50,000 \
\text { Selling \& Administrative } & \underline{50,000} & \underline{12,500} \
\text { Total } & \$ 150,000 & \$ 62,500
\end{array}$$ What is the markup on fixed costs needed to obtain a target profit of $75,000?

Quizplus · Accepted Answer

The Answer of Tootsie Manufacturing Company has the following budgeted costs for 10,000 units:
$$\begin{array} { l c c } 
&\underline{\text { Variable Costs }}&\underline{\text { Fixed Costs }}\
\text { Manufacturing } & \$ 100,000 & \$ 50,000 \
\text { Selling \& Administrative } & \underline{50,000} & \underline{12,500} \
\text { Total } & \$ 150,000 & \$ 62,500
\end{array}$$ What is the markup on fixed costs needed to obtain a target profit of $75,000?

Tootsie Manufacturing Company Has the Following Budgeted Costs for 10,000