The Following Costs Relate to Tower Company: Variable Manufacturing Cost

question 102

Multiple Choice

The following costs relate to Tower Company: Variable manufacturing cost, $30; variable selling and administrative cost, $8; applied fixed manufacturing overhead, $15; and allocated fixed selling and administrative cost, $4.
-If Tower uses total-cost pricing formulas, the company's markup percentage would be computed on the basis of:

• A) $30.
• B) $38.
• C) $45.
• D) $57.
• E) None of the answers is correct.

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Definitions:

Consumer Surplus

The difference between the amount consumers are willing to pay for a good or service versus what they actually pay.

Demand Curve

A graph showing the relationship between the price of a good and the quantity of the good that consumers are willing and able to purchase at various prices.

Consumer Surplus

The difference between the total amount that consumers are willing to pay for a good or service and the total amount they actually pay.

Alfred Marshall

A prominent British economist known for his significant contributions to microeconomics and for popularizing the use of supply and demand graphs.