SawTown Tools Uses Cost-Plus Pricing with a 30% Mark-Up

question 117

Multiple Choice

SawTown Tools uses cost-plus pricing with a 30% mark-up.The company is currently selling 80,000 units at $65 per unit.Each unit has a variable cost of $47.In addition, the company incurs $240,000 in fixed costs annually.If demand falls to 40,000 units and the company wants to continue to charge the same price per unit, what markup percentage is the company using?

• A)22.6%
• B)26.2%
• C)36.1%
• D)30.1%

Apply mathematical skills to solve supply chain economics problems.

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Understand the calculation of geometric return for different periods.

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Definitions:

Average Cost

The total cost divided by the number of goods or services produced or acquired.

Shares

Ownership stakes in a company or financial asset that are divided equally among shareholders, allowing them to receive proportional shares of any declared profits through dividends.

Gross Monthly Earnings

The total amount of income earned in a month before any deductions such as taxes or retirement contributions.

Commission Rates

The percentage or fixed fee that a salesperson receives as compensation for their sales contributions.