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

question 30

Multiple Choice

Lacy Corporation uses the absorption costing approach to cost-plus pricing described in the text to set prices for its products. Based on budgeted sales of 86,000 units next year, the unit product cost of a particular product is $81.60. The company's selling and administrative expenses for this product are budgeted to be $1,247,000 in total for the year. The company has invested $360,000 in this product and expects a return on investment of 12%. The markup on absorption cost for this product would be closest to:

• A)12.0%
• B)18.4%
• C)29.8%
• D)17.8%

---

Definitions:

Financial Success

The achievement of financial objectives and goals, often marked by wealth accumulation, debt reduction, and financial security.

Set Point

A theory suggesting that the body maintains its weight and energy reserve at a particular level, which is predetermined by genetics.

Homeostasis

The tendency of a biological system to maintain stable internal conditions despite external changes.

Optimal Weight

Optimal Weight refers to an individual's weight considered ideal for health and well-being, taking into account factors like height, age, muscle-fat ratio, and bone density.