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Target profit is $100,000; total fixed costs are $120,000, and total variable costs are $500,000, the markup percentage is

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Ayokenny2001idn

The markup percentage to the variable cost using the variable cost method is 40%.

What is markup percentage?

The markup percentage to the variable cost using the variable cost method can be obtained by dividing the addition of the target profit and total fixed cost by the total variable cost as follows.

We know that:

Total fixed cost

= Fixed overhead costs + Fixed selling and administrative costs

= $120,000 + $50,00

= $170,000

The markup percentage to the variable cost

= (Target profit + Total fixed cost) / Total variable cost

= ($100,000 + $170,000) / $675,000

= $270,000 / $675,000

= 0.40, or 40%.

Hence, the markup percentage to the variable cost using the variable cost method is 40%.

Learn more about markup percentage here : https://brainly.com/question/26085685

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