Baker Company budgeted the following costs for the production of its one and only product, blades, for the next fiscal year:
Baker has a target profit of $150,000.
-The average target profit percentage for setting prices as a percentage of prime costs would be
A) 54 percent.
B) 87 percent.
C) 169 percent.
D) 122 percent.

Question

Baker Company budgeted the following costs for the production of its one and only product, blades, for the next fiscal year:
  Baker has a target profit of $150,000.
-The average target profit percentage for setting prices as a percentage of prime costs would be
A) 54 percent. 
B) 87 percent. 
C) 169 percent. 
D) 122 percent.

Quizplus · Accepted Answer

The average target profit percentage for setting prices as a percentage of prime costs is typically 169 percent, which is a common markup used in pricing strategies.

Baker Company Budgeted the Following Costs for the Production of Its