The Management of Store Corporation Would Like to Set the Selling

question 61

Multiple Choice

The management of Store 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 6,000 units of the new product annually. The new product would require an investment of $1,140,000 and has a required return on investment of 10%.
-To the nearest whole percent,the markup percentage on absorption cost is:

• A)10%
• B)30%
• C)50%
• D)20%