Answer the following questions using the information below:
Botany Manufacturers has invested $1 000 000 in a plant to make commercial juicer machines.The target operating profit desired from the plant is $180 000 annually.The company plans annual sales of 7000 juicer machines at a selling price of $200 each.
-What is the mark-up percentage as a percentage of cost for Botany Manufacturers?

Question

Quizplus · Accepted Answer

The cost per juicer machine is calculated as follows: Total sales revenue is $1,400,000 (7000 machines x $200). The desired profit is $180,000, so the total cost is $1,220,000 ($1,400,000 - $180,000). The cost per machine is $174.29 ($1,220,000 / 7000). The mark-up is $25.71 ($200 - $174.29). The mark-up percentage is ($25.71 / $174.29) x 100% = 14.8%.

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