A firm charges $14 for a product. If the markup is 40 percent, then the fully allocated average cost is
A) $19.60.
B) $10.00.
C) $8.40.
D) None of the above is correct.

Name: A firm charges $14 for a product. If the markup is 40 percent, then the fully allocated average cost is A) $19.60. B) $10.00. C) $8.40. D) None of the above is correct.
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Question

Quizplus · Accepted Answer

The fully allocated average cost can be found by dividing the selling price by 1 plus the markup percentage (in decimal form). So, $14 / (1 + 0.40) = $10.

A Firm Charges $14 for a Product