The markup over cost under the absorption costing approach would decrease if the required rate of return increases, holding everything else constant.

Question

Quizplus · Accepted Answer

Under the absorption costing approach, the markup over cost is determined by the desired rate of return on investment or on sales, not directly by the cost. Increasing the required rate of return would typically lead to an increase in the markup to achieve the higher return, not a decrease.

The Markup Over Cost Under the Absorption Costing Approach Would