The Merchandise Cost from the Vendor for an MP3 Player

question 63

Multiple Choice

The merchandise cost from the vendor for an MP3 player is $82.50, and the retailer who is selling the device wants to use an initial markup percentage of 67 percent. Calculate the initial retail price.

• A) $149.50
• B) $272
• C) $55
• D) $123
• E) $250

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Definitions:

Period Cost

Expenses that are incurred during a specific accounting period but not directly tied to the production process, such as selling, general, and administrative expenses.

General Cost

A type of expense that is not directly tied to production or operations but is necessary for overall business function, like utilities or rent.

Prime Costs

The combined costs of direct materials and direct labor that are directly attributable to the manufacturing process.

Direct Materials

Materials that are directly consumed in the production of a product and are easily traceable to it.