Patterson and Clay Companies both use cost-plus pricing formulas and arrived at a selling price of $1,000 for the same product.Patterson uses absorption manufacturing cost as the basis for computing its dollar markup whereas Clay uses total cost.Which of the following choices correctly denotes the company that would have (1) the higher cost basis for deriving its dollar markup and (2) the higher markup percentage? 
Definitions:
SEC
The U.S. Securities and Exchange Commission, regulating and overseeing the securities industry.
Prospectus
A document published by a corporation explaining, in simplified fashion for potential investors, the details of a stock issuance and the business making the offer.
Potential Investor
An individual or entity that is considering investing capital in a project, company, or security.
Stock Acquisition
The process of purchasing shares of a company, thereby obtaining a portion of its ownership.
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