A Producer Makes an Item for $32 and Sells It

question 25

Multiple Choice

A producer makes an item for $32 and sells it with a 50 percent markup to a wholesaler.The wholesaler then applies a 20 percent markup.A retailer then uses a 60 percent markup.The final retail selling price is

• A)$200.00.
• B)$73.60.
• C)$64.00.
• D)$80.00.
• E)The final retail price cannot be determined without stockturn information.

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Definitions:

Process Costing

An accounting methodology used for homogenous products, where costs are assigned to production processes or departments and averaged over the units produced.

Cost per Unit

The cost to produce a single unit of product, calculated by dividing the total production cost by the number of units produced.

Total Manufacturing Cost

The aggregate expenses involved in making a product, including raw materials, direct labor, and overhead costs.

Job Costing System

An accounting method used to track costs and profitability of individual jobs or projects, allowing for precise control and reporting of expenses.