Ecob Corporation Uses the Absorption Costing Approach to Cost-Plus Pricing

question 98

Multiple Choice

Ecob Corporation uses the absorption costing approach to cost-plus pricing as described in the text to set prices for its products. Based on budgeted sales of 22,000 units next year, the unit product cost of a particular product is $60.80. The company's selling and administrative expenses for this product are budgeted to be $375,600 in total for the year. The company has invested $300,000 in this product and expects a return on investment of 9%.The markup on absorption cost for this product would be closest to: (Do not round intermediate calculations.)

• A) 26.1%
• B) 30.1%
• C) 9.0%
• D) 28.1%

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Definitions:

Physical Facilities

The tangible, physical assets and infrastructure of an organization, including buildings, equipment, and grounds.

Viability

A measure of whether a project, business, or concept can sustain itself and succeed in the long-term.

Skilled Workforce

A labor pool consisting of workers who have specialized training, knowledge, and abilities in their respective fields.

HR Managers

Professionals responsible for overseeing employee-related functions such as hiring, training, and benefits in an organization.