ACCA PM · Chapter 7 · Question 8 of 10
A product has a full cost of $64 per unit, of which $40 is variable. The company sets prices using full cost plus 25%. What mark-up on variable cost would give the same selling price?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) 100%
Explanation
Selling price = $64 x 1.25 = $80. Mark-up on variable cost = ($80 - $40) / $40 = 100%.
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