The Following Costs Relate to Southside Company: Variable Manufacturing Cost,$30;variable

question 72

Multiple Choice

The following costs relate to Southside Company: Variable manufacturing cost,$30;variable selling and administrative cost,$8;applied fixed manufacturing overhead,$15;and allocated fixed selling and administrative cost,$4.If Southside uses absorption manufacturing-cost pricing formulas,the company's markup percentage would be computed on the basis of:

• A)$30.
• B)$38.
• C)$45.
• D)$57.
• E)some other amount.

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Definitions:

Marginal Costs

The additional cost incurred by producing one more unit of a product, which can vary as production scales.

Diseconomies of Scale

A situation where an increase in production leads to higher average costs for firms, contrary to economies of scale.

ATC

Average Total Cost, the total cost divided by the quantity of output produced; it's a measure of per-unit production cost.

MC

Short for marginal cost, it represents the change in total cost that arises when the quantity produced is incremented by one unit.