Sauna Company has average invested capital of $900,000 and a


Question Description:

30

Sauna Company has average invested capital of $900,000 and a target ROI of 20%. The company determines its markup percentage based on absorption costing. Manufacturing costs per unit are as follows: direct materials $6, direct labour $8, variable overhead $2, fixed overhead $2. Unit sales are expected to be 40,000 next year. Total selling and administrative costs are expected to be $360,000. What is Sauna’s mark-up percentage ?

Answer

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