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%

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Definitions:

Bicarbonate Ions

A negatively charged ion that acts as a significant component of the bicarbonate buffer system, helping to maintain pH balance in blood and other bodily fluids.

Phosphate Ions

Negatively charged ions (PO4^3-) that play crucial roles in biological processes such as energy transfer and cellular regulation.

Sensible Perspiration

Perspiration excreted by the sweat glands that appears as moisture on the skin; produced in large quantity when there is much humidity in the atmosphere.

Sweat Glands

Glands in the skin that produce sweat as a means to cool the body and eliminate certain waste products.