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:

Salespeople

Individuals who sell products or services to customers, often working on commission and focusing on meeting customer needs and closing sales.

Missionary Salespeople

Sales representatives who generate sales by promoting the firm and encouraging demand for its products.

Order-Takers

Sales personnel whose primary role is to facilitate transactions by taking orders from customers rather than actively seeking new sales.

Order-Getters

Sales personnel whose primary responsibilities are to generate customer interest, make sales, and establish and maintain relationships with new and existing customers.