Alpine, Inc

question 40

Essay

Alpine, Inc. sells a single product. The following information relates to the year just ended:
Number of units sold: 40,000
Variable cost per unit: $200
Total fixed cost: $2,400,000
Operating income: $3,800,000
Required:
A. Compute the company's selling price.
B. Compute the percentage markup on total cost. Round your answer to two decimal places.
C. Assume that Alpine desired to change its practice of computing a markup on total cost to a markup on variable cost. If the company wants to hold selling price constant, would the markup percentage increase or decrease? By how much?

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Definitions:

Tax

Mandatory financial charge or some other type of levy imposed upon a taxpayer by a governmental organization in order to fund public expenditures.

Competitive Market

A market in which there are many buyers and sellers of the same good or service, none of whom can influence the price at which the good or service is sold.

Taxi Rides

Services offered by vehicles, typically cars, for hire to transport individuals from one location to another, based on a fare.

Excise Tax

A tax imposed on specific goods, services, or activities, often with the intention to reduce their consumption or generate revenue.