The Management of Musselman Corporation Would Like to Set the Selling

question 44

Multiple Choice

The management of Musselman Corporation would like to set the selling price on a new product using the absorption costing approach to cost-plus pricing. The company's accounting department has supplied the following estimates for the new product: Management plans to produce and sell 9,000 units of the new product annually. The new product would require an investment of $1,305,000 and has a required return on investment of 10%.
The markup percentage on absorption cost is closest to:

• A) 25%
• B) 34%
• C) 15%
• D) 10%

---

Definitions:

Operant Conditioning

Through Operant Conditioning, an individual's behavior is altered by the use of punishments or reinforcements to increase or decrease its frequency.

Insight Learning

A form of cognitive learning where the solution to a problem suddenly becomes clear without trial-and-error, often through understanding the underlying structure of the problem.

Observational Learning

A learning process through watching the behaviors of others and then imitating or modeling those behaviors.

Retention

The ability to maintain or keep information in the mind, or the act of preserving something.