Jaakola Corporation Makes a Product with the Following Costs

question 45

Multiple Choice

Jaakola Corporation makes a product with the following costs:
The company uses the absorption costing approach to cost-plus pricing described in the text.The pricing calculations are based on budgeted production and sales of 28,000 units per year.The company has invested $360,000 in this product and expects a return on investment of 15%.The markup on absorption cost would be closest to:

• A) 27.1%
• B) 29.9%
• C) 84.3%
• D) 15.0%

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