Partridge Co

question 50

Multiple Choice

Partridge Co.has produced a product with a total unit cost of $60 and a desired ROI per unit of $25.If Partridge Co.'s target selling price is $85, what is its percentage markup on cost?

• A)141.67%
• B)100%
• C)50%
• D)41.67%

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Definitions:

Profitability

Refers to a company's ability to generate earnings over its costs and expenses within a specified time frame.

Absorption Costing

A costing method that includes all manufacturing costs—direct materials, direct labor, and both variable and fixed overhead—in the cost of a product.

Return on Investment

A performance measure used to evaluate the efficiency or profitability of an investment, calculated by dividing the return of an investment by its cost.

Markup Percentage

The percentage by which the cost of a product is increased to determine its selling price.