Massano Motors Expects to Produce 10,000 Motors During the Upcoming

Multiple Choice

Massano Motors expects to produce 10,000 motors during the upcoming year. It has budgeted for the following: net income of $200,000; variable costs of $500,000; and fixed costs of $300,000. The company has invested assets of $1,000,000 and a budgeted return on investment (ROI) of 20%. What is the budgeted markup percentage used in pricing each motor using a cost-plus method of pricing?

A) 15%
B) 20%
C) 25%
D) 30%