Quamma Corporation Makes a Product That Has the Following Costs

question 32

Essay

Quamma Corporation makes a product that has the following costs:
The company uses the absorption costing approach to cost-plus pricing as described in the text.The pricing calculations are based on budgeted production and sales of 23,000 units per year.
The company has invested $280,000 in this product and expects a return on investment of 8%.
Required:
a.Compute the markup on absorption cost.
b.Compute the selling price of the product using the absorption costing approach.

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