Crimpson Company has invested $2,200,000 in a plant to make commercial juicer machines. The target operating income desired from the plant is $303,000 annually. The company plans annual sales of 7000 juicer machines at a selling price of $500 each.
What is the markup percentage as a percentage of cost for Crimpson Company?

Question

Quizplus · Accepted Answer

Sales revenue = 7000 units × $500 = $3,500,000.
Markup percentage = $303,000 / ($3,500,000 - $303,000) = 9.5%.

Crimpson Company Has Invested $2,200,000 in a Plant to Make