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

question 43

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 19,000 units next year, the unit product cost of a particular product is $16.00. The company's selling and administrative expenses for this product are budgeted to be $250,800 in total for the year. The company has invested $440,000 in this product and expects a return on investment of 14%.The markup on absorption cost for this product would be closest to:

• A) 96.5%
• B) 102.8%
• C) 14.0%
• D) 82.5%

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Definitions:

Realistic Conflict Theory

A theory suggesting that intergroup conflict and prejudice arise from competition between groups for resources or status.

Scarce Resources

Limited or insufficient supplies of commodities or assets that are in demand.

Stereotypes

Overgeneralized beliefs about a particular category of people, simplifying complex individuals to generalized traits.

Brief Interactions

Short and transient exchanges between individuals that may have implications for social and professional relationships.