Crystal Lighting Inc. produces and sells lighting fixtures. An entry light has a total cost of $80 per unit, of which $54 is product cost and $26 is selling and administrative expenses. In addition, the total cost of $80 is made up of $40 variable cost and $40 fixed cost. The desired profit is $55 per unit. Determine the markup percentage on product cost.

Explanation:

Mark up percentage = [ (desired profit ) + (Total selling and administrative expenses) ] / total product cost

Desired profit = $55

Total selling and administrative expenses = $26

Total cost = $80

($55 + $26)/80 = 1.0125

1.0125 - 1 = 0.0125 = 1.25%

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i'ts proportional. if the inflation rate is 12% for example, the cpi will be 12% less.

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