How to compute markup per unit


A company expects to produce and sell 9,000 units of a single product. Management desires an 18% return on assets of $1,750,000. The following additional company information is available:

  • Variable cost (per unit)
  • Production cost $79
  • Non-Production cost $5
  • fixed costs
  • Overhead $279,000
  • non-prouction $90,000

Compute markup per unit. Assume that markup percentage equals desired profit divided by total costs.

  1. $84
  2. $125
  3. $160
  4. $35
  5. $110

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Accounting Basics: How to compute markup per unit
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