Yelk Garage Uses Time and Materials Pricing What Should Yelk Set as the Materials Markup Per Dollar

Yelk Garage uses time and materials pricing.It is setting prices for next year using the following information: $$\begin{array}{l}\begin{array} { l l r } \text { Labor rate, including fringe benefits}&\$ 50 \text { per hour } \\\text { Annual labor hours}&3,350 \text { hours } \\\text { Annual materials purchases}&\$ 825,000 \\\text { Materials purchasing, handling, and storage}&\$ 41,250 \\\text { Overhead for depreciation, taxes, insurance, etc.}&\$ 67,000 \\\text { Target profit margin for both labor and materials}&20 \%\end{array}\end{array}$$ What should Yelk set as the materials markup per dollar of materials used?

A) 25%.
B) 5%.
C) 20%.
D) 35%.
E) 30%.

Correct Answer:

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