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%

Question

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%

Quizplus · Accepted Answer

The Answer of 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%

The Management of Matsuura Corporation Would Like to Set the Selling