{"id":184495,"date":"2025-01-21T06:02:51","date_gmt":"2025-01-21T06:02:51","guid":{"rendered":"https:\/\/learnexams.com\/blog\/?p=184495"},"modified":"2025-01-21T06:02:53","modified_gmt":"2025-01-21T06:02:53","slug":"marshall-grocery-delivery-service-reports-the-following-information","status":"publish","type":"post","link":"https:\/\/www.learnexams.com\/blog\/2025\/01\/21\/marshall-grocery-delivery-service-reports-the-following-information\/","title":{"rendered":"Marshall Grocery Delivery Service reports the following information"},"content":{"rendered":"\n<p>Marshall Grocery Delivery Service reports the following information: Direct labor rate per hour Non-materials related overhead per hour Materials-related overhead Target profit margin The materials markup per dollar of materials cost is: Materials markup $ 20 $ 25.80 4% of Direct materials cost 20%<\/p>\n\n\n\n<p><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-ast-global-color-6-color\"><strong>The Correct Answer and Explanation is :<\/strong><\/mark><\/p>\n\n\n\n<p>To determine the materials markup per dollar of materials cost, we need to calculate the cost associated with materials-related overhead and the profit margin. Here&#8217;s the breakdown:<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Given:<\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Direct labor rate per hour<\/strong>: $20<\/li>\n\n\n\n<li><strong>Non-materials related overhead per hour<\/strong>: $25.80<\/li>\n\n\n\n<li><strong>Materials-related overhead<\/strong>: 4% of direct materials cost<\/li>\n\n\n\n<li><strong>Target profit margin<\/strong>: 20%<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">Step 1: Materials-related overhead<\/h3>\n\n\n\n<p>The materials-related overhead is <strong>4% of direct materials cost<\/strong>. For every dollar of direct materials cost, the overhead is:<br>[<br>\\text{Materials-related overhead} = 0.04 \\times \\text{Direct materials cost}<br>]<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Step 2: Target profit margin<\/h3>\n\n\n\n<p>The target profit margin is <strong>20%<\/strong>, which is applied to the total cost (direct materials cost + materials-related overhead). For every dollar of direct materials cost, the profit margin is:<br>[<br>\\text{Profit margin} = 0.20 \\times (\\text{Direct materials cost} + \\text{Materials-related overhead})<br>]<\/p>\n\n\n\n<p>Substituting the materials-related overhead into the equation:<br>[<br>\\text{Profit margin} = 0.20 \\times (1 + 0.04)<br>]<br>[<br>\\text{Profit margin} = 0.20 \\times 1.04 = 0.208<br>]<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Step 3: Total materials markup<\/h3>\n\n\n\n<p>The total materials markup per dollar of materials cost includes both the materials-related overhead and the profit margin:<br>[<br>\\text{Materials markup} = 0.04 + 0.208 = 0.248<br>]<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Final Answer:<\/h3>\n\n\n\n<p>The materials markup per dollar of materials cost is <strong>24.8%<\/strong>.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h3 class=\"wp-block-heading\">Explanation:<\/h3>\n\n\n\n<p>The materials markup accounts for the indirect costs of handling materials (materials-related overhead) and the target profit margin. The <strong>4% materials-related overhead<\/strong> reflects expenses directly tied to materials handling. The <strong>20% target profit margin<\/strong>, applied to the combined cost of materials and overhead, ensures the company meets its profitability goals. By summing these components, we get a markup of <strong>24.8%<\/strong>, which is applied to each dollar of direct materials cost to ensure all costs and profit expectations are covered effectively.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Marshall Grocery Delivery Service reports the following information: Direct labor rate per hour Non-materials related overhead per hour Materials-related overhead Target profit margin The materials markup per dollar of materials cost is: Materials markup $ 20 $ 25.80 4% of Direct materials cost 20% The Correct Answer and Explanation is : To determine the materials [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"footnotes":""},"categories":[25],"tags":[],"class_list":["post-184495","post","type-post","status-publish","format-standard","hentry","category-exams-certification"],"_links":{"self":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts\/184495","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/comments?post=184495"}],"version-history":[{"count":0,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts\/184495\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/media?parent=184495"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/categories?post=184495"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/tags?post=184495"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}