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Holding All Other Things Constant, an Increase in Fixed Production

Question 3

Multiple Choice

Holding all other things constant, an increase in fixed production costs will affect:


A) the markup under the absorption costing approach to cost-plus pricing.
B) the markup used to compute the profit-maximizing price.
C) both the markup under the absorption costing approach to cost-plus pricing and the markup used to compute profit-maximizing price.
D) neither the markup under the absorption costing approach to cost-plus pricing nor the markup used to compute profit-maximizing price.

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