The Markup Percentage in the Absorption-Cost Approach Is Computed by Dividing

question 57

Multiple Choice

The markup percentage in the absorption-cost approach is computed by dividing the sum of the desired ROI per unit and

• A) fixed costs per unit by manufacturing cost per unit.
• B) fixed costs per unit by variable costs per unit.
• C) selling and administrative expenses per unit by manufacturing cost per unit.
• D) selling and administrative expenses per unit by variable costs per unit.

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Definitions:

Growth Related Profit

Profit that results from expansion in business size, output, or market share, indicative of a company’s growth.

Market Share

The proportion of total sales in a market captured by a particular company or product.

Good Quality Product

An item that meets or exceeds expectations in terms of performance, durability, and satisfaction.

Game Frequency

The rate or occurrence at which a specific game or set of games is played, utilized especially in the analysis of repeated games in game theory.