Jamison Company uses the total cost method of applying the cost-plus approach to product pricing. Jamison produces and sells Product X at a total cost of $1,100 per unit, of which $750 is product cost and $350 is selling and administrative expenses. In addition, the total cost of $1,100 is made up of $630 variable cost and $470 fixed cost. The desired profit is $143 per unit. Required:
Determine the mark up percentage on total cost.

The mark up percentage on total cost is 13%.

Explanation:

Mark up percentage on total cost refers to the profit as a percentage of the total cost.

Therefore, the mark up percentage on total cost can be calculated using the following formula:

Mark up percentage on total cost = (Desired profit / Total cost) * 100 (1)

Where;

Desired profit = $143

Total cost = $1,100

Substituting the values into equation (1), we have:

Mark up percentage on total cost = ($143 / $1,100) * 100 = 0.13 * 100 = 13%

Therefore, the mark up percentage on total cost is 13%.

answernet income for 2017 will be greater if the inventory quantity declines;