Edelheit Company Uses the Absorption Costing Approach to Cost-Plus Pricing

question 53

Multiple Choice

Edelheit Company 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 26,000 units next year, the unit product cost of a particular product is $24.20. The company's selling and administrative expenses for this product are budgeted to be $629,000 in total for the year. The company has invested $340,000 in this product and expects a return on investment of 14%.
-The markup on absorption cost for this product would be closest to:

• A)100.0%
• B)14.0%
• C)114.0%
• D)107.5%

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