Jabal Corporation Makes a Product with the Following Costs

question 43

Multiple Choice

Jabal 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 28,000 units per year.
The company has invested $560,000 in this product and expects a return on investment of 10%.
The markup on absorption cost would be closest to:

• A) 46.0%
• B) 10.0%
• C) 141.1%
• D) 49.7%

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