The Management of Musselman Corporation Would Like to Set the Selling

question 52

Multiple Choice

The management of Musselman Corporation would like to set the selling price on a new product using the absorption costing approach to cost-plus pricing. The company's accounting department has supplied the following estimates for the new product:
Management plans to produce and sell 9,000 units of the new product annually. The new product would require an investment of $1,305,000 and has a required return on investment of 10%.
-The markup percentage on the new product would be closest to:

• A) 51.0%
• B) 12.5%
• C) 24.0%
• D) 59.5%

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Definitions:

Prescription

A written order from a healthcare professional that authorizes a patient to be provided a medicine or treatment.

Narcotic

Drugs that relieve pain and often induce sleep, but can also lead to dependence or addiction; originally referred specifically to opium-derived substances.

Ointment

A smooth oily preparation that is applied to the skin for a therapeutic purpose or as a cosmetic.

Enema

A medical procedure involving the introduction of liquid into the rectum and colon via the anus to clear out the bowel or administer drugs or food.