Patterson and Clay Companies Both Use Cost-Plus Pricing Formulas and Arrived

question 17

Multiple Choice

Patterson and Clay Companies both use cost-plus pricing formulas and arrived at a selling price of $1,000 for the same product. Patterson uses absorption manufacturing cost as the basis for computing its dollar markup whereas Clay uses total cost. Which of the following choices correctly denotes the company that would have (1) the higher cost basis for deriving its dollar markup and (2) the higher markup percentage?

• A) Choice A
• B) Choice B
• C) Choice C
• D) Choice D
• E) Choice E

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Definitions:

Cell Body

The part of a neuron that contains the nucleus and most of the cytoplasm and where the metabolic work of the cell is done.

Axon

A long, thin part of a neuron that transmits impulses to other neurons through small branching structures called axon terminals.

Neuron

A neuron, which is the fundamental unit of the nervous system, plays a key role in conveying information across the body.

Lactation

The production and secretion of breast milk by mammalian mothers following childbirth, providing nourishment to the newborn.