Magpie Corporation uses the total cost concept of product pricing. Below is the cost information for the production and sale of 56,600 units of its sole product. Magpie desires a profit equal to a 21% rate of return on invested assets of $584,000.
| Fixed factory overhead cost | $38,600 |
| Fixed selling and administrative costs | $8,000 |
| Variable direct materials cost per unit | $4.92 |
| Variable direct labor cost per unit | $1.88 |
| Variable factory overhead cost per unit | $1.13 |
| Variable selling and administrative cost per unit | $4.50 |
The markup percentage on the total cost for the company’s product is
a. 16.3%
b. 13.1%
c. 27.8%
d. 21.3%
Which of the following factors is least likely to be associated with a company having a high dividend payout ratio?
a. Low flotation costs on new equity issues.
b. Low tax rates on dividends.
c. High growth prospects.
d. High tax rates on capital gains.
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