Markup Percentage and Selling Price Formulas

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Questions and Answers

What is the first step in determining the cost per service unit?

  • Calculating the total semi-variable cost (correct)
  • Calculating the total service cost
  • Determining the total service unit
  • Adding all costs together

In Example #1, what is considered a fixed cost for La MiraBella Hotel's cleaning service?

  • Cleaning team's salary (correct)
  • Equipment
  • Supplies
  • Total variable costs

How many hours does it take for the cleaning team at La MiraBella Hotel to clean the entire hotel daily?

  • 5 hours
  • 12 hours (correct)
  • 10 hours
  • 15 hours

What is the total service unit calculation for La MiraBella Hotel?

<p>360 hours (B)</p> Signup and view all the answers

What is the formula to calculate service cost per unit?

<p>$\text{Total Service Cost} \div \text{Total Service Unit}$ (A)</p> Signup and view all the answers

What is the first step to calculate the product cost per unit?

<p>Sum up all direct materials and direct labor costs (B)</p> Signup and view all the answers

How is the product cost per unit calculated in the given scenario?

<p>Divide total product cost by the number of units produced (D)</p> Signup and view all the answers

What is service costing mainly used for?

<p>Determining the cost of providing a specific service (D)</p> Signup and view all the answers

Which cost is not included in the calculation of product cost per unit?

<p>Preservatives cost (C)</p> Signup and view all the answers

What should be done after summing up all direct materials and direct labor costs?

<p>Calculate total overhead costs (D)</p> Signup and view all the answers

If 10,000 pieces of ice cream are produced instead of 7,000, how does this change affect the product cost per unit?

<p>Increases the product cost per unit (B)</p> Signup and view all the answers

What is a predetermined markup percentage?

<p>A percentage added to a product's cost to determine its selling price (B)</p> Signup and view all the answers

Which formula is used to calculate the predetermined markup percentage?

<p>(Desired profit / Total Cost of the product or service) * 100 (C)</p> Signup and view all the answers

In Edward's example, what revenue increase does he aim for?

<p>35% (D)</p> Signup and view all the answers

What is the purpose of determining the total product cost according to the text?

<p>To calculate the selling price accurately (C)</p> Signup and view all the answers

What does the desired profit represent in the context of business?

<p>The profit level a business aims to achieve over time (C)</p> Signup and view all the answers

What formula can Edward use to compute his desired profit?

<p>(Desired Revenue – Total Cost of the product or service) (B)</p> Signup and view all the answers

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