Nancy Company has budgeted sales of $300,000 with the following budgeted costs:
- Direct materials $60,000
- Direct manufacturing labor 40,000
- Factory overhead
- Variable 30,000
- Fixed 50,000
Selling and administrative expenses
Variable 20,000
Fixed 30,000
a) Compute the average markup percentage for setting prices as a percentage of the full cost of the product.
b) Compute the average markup percentage for setting prices as a percentage of the variable cost of the product.
c) Compute the average markup percentage for setting prices as a percentage of the variable manufacturing costs.