Raymond Company Estimates That an Investment of $800,000 Would Be

question 11

Multiple Choice

Raymond Company estimates that an investment of $800,000 would be necessary to produce and sell 40,000 units of Product S each year. Costs associated with the new product would be: The company requires a 20% return on the investment in all products. The company used the absorption costing approach to cost-plus pricing as described in the text.
-The markup percentage needed on Product S in order to achieve the company's required return on investment would be:

• A) 29%
• B) 40%
• C) 50%
• D) 37%

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