Federer Industries Budgeted the Following Costs for the Production of Its

question 44

Multiple Choice

Federer Industries budgeted the following costs for the production of its only product, tennis balls, for the next fiscal year: $$\begin{array} { l r } \text { Materials } & \$ 35,000 \\\text { Labor } & 25,000 \\\text { Overhead: } & \\\text { Variable } & 30,000 \\\text { Fixed } & 15,000 \\\text { Selling and administrative: } & \\\text { Variable } & 7,500 \\\text { Fixed } & \underline { 12,500 } \\\text { Total costs } & \$ 125,000\end{array}$$ Federer Industries has a target profit of $50,000.The average target markup for setting prices as a percentage of total variable costs would be _____.

• A)158%
• B)38%
• C)63%
• D)79%

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Definitions:

Dangerous

Involving potential harm or risk to safety, health, or well-being.

Deceptive Advertising

Marketing practices that mislead or falsely represent products or services to consumers, potentially leading to uninformed or harmful purchasing decisions.

Puffery

The act of making exaggerated, subjective claims about a product or service that cannot be objectively verified, often used in advertising.

World's Best

A term often used in rankings or awards to designate entities, individuals, or products considered superior in their category based on specific criteria.