The predicted 2017 costs for Gamma Motors are as follows:
$$\begin{array} { c }
\underline{\text { Manufacturing Costs }} & \
\begin{array}{lcr}
\text { Variable } && \$ 250,000 \
\text { Fixed } && 450,000
\end{array}
\end{array}
\begin{array} { c }
\underline{\text { Selling and Administrative Costs }}\
\begin{array}{lcr}
\text { Variable } && \$ 600,000 \
\text { Fixed } && 300,000
\end{array}
\end{array}
$$ Average total assets for 2017 are predicted to be $5,000,000.
If the company desires a 10 percent rate of return on total assets, what is the markup percentage on total manufacturing costs for the desired profit?

Question

The predicted 2017 costs for Gamma Motors are as follows:
$$\begin{array} { c } 
\underline{\text { Manufacturing Costs }} & \
\begin{array}{lcr}
\text { Variable } && \$ 250,000 \
\text { Fixed } && 450,000
\end{array}
\end{array}
\begin{array} { c } 
\underline{\text { Selling and Administrative Costs }}\
\begin{array}{lcr}
\text { Variable } && \$ 600,000 \
\text { Fixed } && 300,000
\end{array}
\end{array}
$$ Average total assets for 2017 are predicted to be $5,000,000.
If the company desires a 10 percent rate of return on total assets, what is the markup percentage on total manufacturing costs for the desired profit?

Quizplus · Accepted Answer

The Answer of The predicted 2017 costs for Gamma Motors are as follows:
$$\begin{array} { c } 
\underline{\text { Manufacturing Costs }} & \
\begin{array}{lcr}
\text { Variable } && \$ 250,000 \
\text { Fixed } && 450,000
\end{array}
\end{array}
\begin{array} { c } 
\underline{\text { Selling and Administrative Costs }}\
\begin{array}{lcr}
\text { Variable } && \$ 600,000 \
\text { Fixed } && 300,000
\end{array}
\end{array}
$$ Average total assets for 2017 are predicted to be $5,000,000.
If the company desires a 10 percent rate of return on total assets, what is the markup percentage on total manufacturing costs for the desired profit?

The Predicted 2017 Costs for Gamma Motors Are as Follows