Diedrich 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 68,000 units per year.The company has invested $380,000 in this product and expects a return on investment of 18%.Direct labor is a variable cost in this company.The markup on absorption cost is closest to: (Round your intermediate calculations to 2 decimal places and final answer to 1 decimal place.)
A) 30.7%
B) 18.0%
C) 77.4%
D) 28.4%

Question

Diedrich 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 68,000 units per year.The company has invested $380,000 in this product and expects a return on investment of 18%.Direct labor is a variable cost in this company.The markup on absorption cost is closest to: (Round your intermediate calculations to 2 decimal places and final answer to 1 decimal place.)
A) 30.7% 
B) 18.0% 
C) 77.4% 
D) 28.4%

Quizplus · Accepted Answer

The Answer of Diedrich 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 68,000 units per year.The company has invested $380,000 in this product and expects a return on investment of 18%.Direct labor is a variable cost in this company.The markup on absorption cost is closest to: (Round your intermediate calculations to 2 decimal places and final answer to 1 decimal place.)
A) 30.7% 
B) 18.0% 
C) 77.4% 
D) 28.4%

Diedrich Corporation Makes a Product with the Following Costs