Using the Variable Cost Concept Determine the Mark-Up Per Unit

question 58

Multiple Choice

Using the variable cost concept determine the mark-up per unit for 30,000 units using the following data: Variable cost per unit $15.00, total fixed costs $90,000 and desired profit $150,000.

• A) $10
• B) $15
• C) $8
• D) $23

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Definitions:

Inflation

The quickness at which the comprehensive level of goods and services' prices rises, corroding purchasing ability.

Real Income

The earning power of a person's money, considering the effects of inflation on purchasing power.

Wages

Payment to resource owners for their labor.

Externality

A consequence of an economic activity experienced by unrelated third parties; it can be either positive or negative.