Pedro Company has predicted the following costs for this year for 50,000 units:
$$\begin{array} { l c c }
& \underline{\text { Manufacturing }} &\underline{\text { Selling and Administrative }} \
\text { Variable } & \$ 100,000 & \$ 25,000 \
\text { Fixed } & \underline{150,000} & \underline{75,000} \
\text { Total } & \$ 250,000 & \$ 100,000
\end{array}$$ What is the initial selling price needed to obtain a target profit of $50,000 using the manufacturing cost markup method?

Question

Pedro Company has predicted the following costs for this year for 50,000 units:
$$\begin{array} { l c c } 
& \underline{\text { Manufacturing }} &\underline{\text { Selling and Administrative }}  \
\text { Variable } & \$ 100,000 & \$ 25,000 \
\text { Fixed } & \underline{150,000} & \underline{75,000} \
\text { Total } & \$ 250,000 & \$ 100,000
\end{array}$$ What is the initial selling price needed to obtain a target profit of $50,000 using the manufacturing cost markup method?

Quizplus · Accepted Answer

The Answer of Pedro Company has predicted the following costs for this year for 50,000 units:
$$\begin{array} { l c c } 
& \underline{\text { Manufacturing }} &\underline{\text { Selling and Administrative }}  \
\text { Variable } & \$ 100,000 & \$ 25,000 \
\text { Fixed } & \underline{150,000} & \underline{75,000} \
\text { Total } & \$ 250,000 & \$ 100,000
\end{array}$$ What is the initial selling price needed to obtain a target profit of $50,000 using the manufacturing cost markup method?

Pedro Company Has Predicted the Following Costs for This Year