Exercise 22-18 (Part Level Submission) Paige Corporation makes a mechanical stuf

Question

Exercise 22-18 (Part Level Submission) Paige Corporation makes a mechanical stuffed alligator that sings the Martian national anthem. The following information is available for Paige Corporation's anticipated annual volume of 494,800 units. Total Per Unit $7.05 $9.20 15.24 Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overheacd Variable selling and administrative expenses Fixed selling and administrative expenses 3,428,964 $ 13.90 1,405,232 The company has a desired ROI of 26%. It has invested assets of $25,910,000 using absorption-cost pricing, compute the markup percentage. (Round answer to 2 decimal places, eg, 10.50%.) Absorption-cost pricing markup percentage

Explanation / Answer

Desired roi per unit + selling and administrative per unit = Markup percentage*Absorption costing price per unit

   (25910000*26%/494800)+(13.90+1405232/494800) = X*38.42

13.61+16.74 = X*38.42

X = 79%

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