Which of the Following Formulas Represents the Markup Percentage on Total

question 7

Multiple Choice

Which of the following formulas represents the markup percentage on total cost?

• A)Target profit ÷ Variable cost.
• B)Target profit ÷ Annual volume.
• C)(Target profit x Total cost per unit) ÷ Annual volume.
• D)(Annual volume x Total cost per unit) ÷ Target profit.
• E)Target profit ÷ (Annual volume x Total cost per unit).

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Definitions:

Total Fixed Costs

Expenses that do not change with the level of production or sales, such as rent, salaries, and insurance premiums, over a certain period of time.

Profit-Maximizing

The process or strategy of adjusting production and operations to generate the highest possible profit.

Total Profit

Total profit is the financial gain made by a business after subtracting all expenses from the total revenue generated from sales and other sources.

Market Share

The share of a market that a certain product or company holds.