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

question 2

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:

Product Features

The attributes or characteristics that make up a product, distinguishing it from others in the market.

User Status

The classification of users based on their engagement level, experience, or purchase history with a service or product.

Psychographic Segmentation

A marketing strategy that divides potential customers into segments based on their personality traits, values, attitudes, interests, or lifestyles.

Income

The financial gain earned from work, investments, business operations, or other sources, typically measured over a specific time period.