If the Markup of a Product Is Twice Its Cost

question 39

Multiple Choice

If the markup of a product is twice its cost, what is the percent of markup on this product based on its selling price to the nearest percent?

• A) 67%
• B) 63%
• C) 33%
• D) 25%

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Definitions:

Variable Costs

Costs that vary directly with the level of production or business activity.

Income From Operations

Income From Operations is the profit realized from a business's operational activities, excluding any investment income or taxes.

Contribution Margin Ratio

The contribution margin ratio is a financial metric that shows what percentage of sales revenue is not consumed by variable costs and thus contributes to covering fixed costs.

Fixed Costs

Costs that remain constant regardless of a company's level of activity, including expenses like lease payments, wages, and premiums.