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</p> Signup and view all the answers

    What is the formula to calculate service cost per unit?

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

    What is service costing mainly used for?

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

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

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

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

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

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