Pauley Company Needs to Determine a Markup for a New

question 18

Multiple Choice

Pauley Company needs to determine a markup for a new product.Pauley expects to sell 15,000 units and wants a target profit of $22 per unit.Additional information is as follows: $$\begin{array} { l r } \text { Variable product cost per unit } & \$ 19 \\\text { Variable administrative cost per unit } & 11 \\\text { Total fixed overhead } & 13,500 \\\text { Total fixed administrative } & 21,000\end{array}$$ Using the variable cost method,what markup percentage to variable cost should be used?

• A)71%
• B)76%
• C)92%
• D)81%
• E)80%

---

Definitions:

Supply of Beef

The total amount of beef that producers are willing and able to sell at a given price level.

Equilibrium Price

The price at which the quantity of a product demanded by consumers equals the quantity supplied by producers, leading to market stability.

Equilibrium Quantity

The amount of products or services available that matches the amount requested at the price where supply and demand balance.

Supply Increases

A situation where the quantity of a good or service that producers are willing to supply at a certain price rises.