Oma Company has the following budgeted costs for 10,000 units:
$$\begin{array} { l c r }
&\underline{\text { Variable Costs }}&\underline{\text { Fixed Costs }}\
\text { Manufacturing } & \$ 200,000 & \$ 100,000 \
\text { Selling \& Administrative } & \underline{175,000} & \underline{50,000} \
\text { Total } & \$ 375,000 & \$ 150,000
\end{array}$$ Required:
a. What is the markup on variable costs needed to break even?
b. What is the markup on variable costs needed to obtain a target profit of $75,000?
c. What is the markup on manufacturing costs needed to obtain a target profit of $75,000?

Question

Oma Company has the following budgeted costs for 10,000 units:
 $$\begin{array} { l c r } 
&\underline{\text { Variable Costs }}&\underline{\text { Fixed Costs }}\
\text { Manufacturing } & \$ 200,000 & \$ 100,000 \
\text { Selling \& Administrative } & \underline{175,000} & \underline{50,000} \
\text { Total } & \$ 375,000 & \$ 150,000
\end{array}$$ Required:
a. What is the markup on variable costs needed to break even?
b. What is the markup on variable costs needed to obtain a target profit of $75,000?
c. What is the markup on manufacturing costs needed to obtain a target profit of $75,000?

Quizplus · Accepted Answer

The Answer of Oma Company has the following budgeted costs for 10,000 units:
 $$\begin{array} { l c r } 
&\underline{\text { Variable Costs }}&\underline{\text { Fixed Costs }}\
\text { Manufacturing } & \$ 200,000 & \$ 100,000 \
\text { Selling \& Administrative } & \underline{175,000} & \underline{50,000} \
\text { Total } & \$ 375,000 & \$ 150,000
\end{array}$$ Required:
a. What is the markup on variable costs needed to break even?
b. What is the markup on variable costs needed to obtain a target profit of $75,000?
c. What is the markup on manufacturing costs needed to obtain a target profit of $75,000?

Oma Company Has the Following Budgeted Costs for 10,000 Units