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The Sierra Company Produces Its Product at a Total Cost

Question 45

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The Sierra Company produces its product at a total cost of $89 per unit. Of this amount, $14 per unit is selling and administrative costs. The total variable cost is $58 per unit and t he desired profit is $28 per unit.
Determine the markup percentage using the:
(a) total cost
(b) product cost
(c) variable cost concept.

Correct Answer:

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(a) Total cost = $28/$89 = 31....

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