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Glover Inc.manufactures Product B, incurring variable costs of $15.00 per unit and fixed costs of $70,000.Glover desires a profit equal to a 12% rate of return on assets.Assets of $785,000 are devoted to producing Product B, and 100,000 units are expected to be produced and sold.
(a)Compute the markup percentage using the total cost concept.
(b)Compute the selling price of Product B.
Net Profit Margin
A profitability ratio calculated as net income divided by revenue, indicating how much profit a company makes with its total sales.
Gross Margin
The difference between revenue and cost of goods sold divided by revenue, expressed as a percentage.
Times Interest Earned
A ratio that measures a company's ability to meet its debt obligations, calculated by dividing earnings before interest and taxes by the interest expense.
Debt-To-Equity Ratio
A financial ratio indicating the relative proportion of shareholder's equity and debt used to finance a company's assets.
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