Use the information below to answer the following question(s).Pershing Company budgeted the following costs for the production of its one and only product, blades, for the next fiscal year:
Pershing has a target profit of $150,000.
-The target profit percentage for setting prices as a percentage of total variable costs would be

Question

Use the information below to answer the following question(s).Pershing Company budgeted the following costs for the production of its one and only product, blades, for the next fiscal year:
  Pershing has a target profit of $150,000.
-The target profit percentage for setting prices as a percentage of total variable costs would be

Quizplus · Accepted Answer

The target profit percentage for setting prices as a percentage of total variable costs would be 29%. This is because the markup percentage is equal to the target profit percentage divided by (1 - target profit percentage). In this case, the target profit percentage is 29%, so the markup percentage is 29% / (1 - 29%) = 41%. This means that the price would be 41% higher than the total variable costs.

Use the Information Below to Answer the Following Question(s)