Question: For Brian, setting prices has always been a clear - cut process: tell him the costs and he'll tell you at what price to sell

For Brian, setting prices has always been a clear

-

cut process: tell him the costs and he'll tell you at what price to sell it

.

Amazingly, his approach has worked flawlessly so far. Brian's manufacturing costs run $

5.00

per unit, and his selling and administrative costs are $

5.00

per unit. To date, he has used a markup of

50 %

on full cost, but he is thinking about changing his selling and administrative situation significantly, which will make those costs more difficult to estimate. If Brian wants to use a new markup percentage based on just manufacturing cost, will that markup percentage need to be higher or lower than

50 %

to generate a comparable profit?

(

Round answer to

0

decimal places, e

.

. 15 % .)

Markup percentage based on manufacturing cost

The markup percentage based on manufacturing cost will need to be

50 % .

For Brian, setting prices has always been a clear

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