Yakking Co

Essay

Yakking Co. manufactures mobile cellular equipment and uses the variable cost method of applying the cost-plus approach to product pricing. Yakking incurs variable costs of $1,900,000 in the production of 100,000 units, while fixed costs total $50,000. The company employs $4,725,000 of assets and wishes to earn a profit equal to a 10% return on invested assets.
a.Compute a markup percentage based on variable cost.
b.Determine a selling price.Round the markup percentage to one decimal place and other intermediate computations and final answer to two decimal places.