Diedrich Corporation Makes a Product with the Following Costs

question 140

Multiple Choice

Diedrich Corporation makes a product with the following costs: The company uses the absorption costing approach to cost-plus pricing described in the text. The pricing calculations are based on budgeted production and sales of 67,000 units per year.
The company has invested $420,000 in this product and expects a return on investment of 12%.
Direct labor is a variable cost in this company.
The markup on absorption cost is closest to:

• A) 12.0%
• B) 51.0%
• C) 49.6%
• D) 126.7%

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Definitions:

High-pitched Frequencies

Sounds that have a high frequency, typically perceived as having a sharp, often uncomfortable tone.

Oxygen

A chemical element vital to most life forms on Earth, critical for respiration and energy production in cells.

Free Radicals

Unstable atoms or molecules with an unpaired electron, which can cause cell damage and contribute to aging and diseases.

Corrodes

The process by which a substance, typically a metal, deteriorates due to chemical reactions with its environment, often leading to rust.