Mercer Corporation estimates that an investment of $650,000 would be necessary to produce and sell 60,000 units of a new product each year. Other costs associated with the new product would be: The company requires a 25% return on the investment in all products. The company uses the absorption costing approach costing to pricing as described in the text.The markup percentage on the new product would be closest to:
A) 51.0%
B) 12.5%
C) 24.0%
D) 59.5%

Question

Mercer Corporation estimates that an investment of $650,000 would be necessary to produce and sell 60,000 units of a new product each year. Other costs associated with the new product would be:  The company requires a 25% return on the investment in all products. The company uses the absorption costing approach costing to pricing as described in the text.The markup percentage on the new product would be closest to:
A) 51.0% 
B) 12.5% 
C) 24.0% 
D) 59.5%

Quizplus · Accepted Answer

The Answer of Mercer Corporation estimates that an investment of $650,000 would be necessary to produce and sell 60,000 units of a new product each year. Other costs associated with the new product would be:  The company requires a 25% return on the investment in all products. The company uses the absorption costing approach costing to pricing as described in the text.The markup percentage on the new product would be closest to:
A) 51.0% 
B) 12.5% 
C) 24.0% 
D) 59.5%

Mercer Corporation Estimates That an Investment of $650,000 Would Be