The Management of Matsuura Corporation Would Like to Set the Selling

question 2

Multiple Choice

The management of Matsuura Corporation would like to set the selling price on a new product using the absorption costing approach to cost-plus pricing. The company's accounting department has supplied the following estimates for the new product: Management plans to produce and sell 1,000 units of the new product annually. The new product would require an investment of $254,000 and has a required return on investment of 10%.
-To the nearest whole percent, the markup percentage on absorption cost is:

• A) 10%
• B) 8%
• C) 18%
• D) 36%

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