Ocean Grove Vending Company has invested $1,450,000 in a plant to make vending machines. The target operating income desired from the plant is $362,500 annually. The company plans annual sales of 1500 vending machines at a selling price of $1000 each.
What is the markup percentage as a percentage of cost for Ocean Grove Vending Company?
A) 24.17%
B) 31.87%
C) 75.83%
D) 25.00%

Question

Quizplus · Accepted Answer

Sales revenue = 1500 units × $1000 = $1,500,000
Markup percentage = [$362,500 / ($1,500,000 - $362,500)] = 31.87%

Ocean Grove Vending Company Has Invested $1,450,000 in a Plant