Joeston Corporation Makes a Product with the Following Costs: the Company

question 62

Multiple Choice

Joeston Corporation makes a product with the following costs: The company uses the absorption costing approach to cost-plus pricing described in the text.The pricing calculations are based on budgeted production and sales of 14,000 units per year.The company has invested $540,000 in this product and expects a return on investment of 10%.The markup on absorption cost would be closest to:
$\begin{array}{c}\begin{array}{lll}\\ \text {Direct materials....................................................}\\ \text {Direct labor...........................................................}\\ \text {Variable manufacturing overhead..........................}\\ \text {Fixed manufacturing overhead...............................}\\ \text {Variable selling and administrative expenses..........}\\ \text {Fixed selling and administrative expenses..............}\end{array}\begin{array}{rr}\text { Per Unit } & \text { Per Year } \\\$ 14.70 & \\\$ 14.10 & \\\$ 3.70 & \\& \$ 305,200 \\\$ 3.00 & \\& \$ 163,800 \end{array}\end{array}$

• A)27.1%
• B)124.2%
• C)34.2%
• D)10.0%

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Definitions:

Electron

A subatomic particle with a negative charge, found in the electron clouds surrounding the nucleus of an atom.

Line Spectra

Line spectra are the emission or absorption of light at specific wavelengths by atoms or molecules transitioning between energy levels, resulting in distinct lines characteristic of the substance.

Quantized Energy Levels

The concept in quantum mechanics that energy levels in atoms and molecules are discrete, not continuous.

Spectral Emissions

The set of wavelengths or frequencies emitted by a substance or object, often used to identify its composition.