Crane Inc. is the only player in the classy snow shovel market. The variety of shovel designs includes camouflage (both green and pink, of course), snowman, beach, and northern lights.
Crane purchases basic aluminum snow shovels from a supplier, applies its durable designs, and sells the shovels for $30 each. Last year, the company generated $55,000 in operating income, based on the following details.

Sales volume in units 10,100 Operating expenses $87,000 DM cost per unit $5.00 DL cost per unit $2.00 Variable-MOH per unit $4.00 Fixed-MOH per unit $2.00 This year, the company realizes that its operating expenses will increase by $14,000 and its direct labor costs will increase by 20% per unit.


(a) What markup percentage on total cost did the company use last year when it generated $55,000 in operating income?

Answer rating: 100% (QA)

To determine the markup percentage we need to calculate the total cost per unit first The to... View the full answer