Ladle Corporation uses the absorption costing approach to cost-plus pricing described in the text to set prices for its products. Based on budgeted sales of 81,000 units next year, the unit product cost of a particular product is $45.30. The company's selling and administrative expenses for this product are budgeted to be $1,898,000 in total for the year. The company has invested $262,000 in this product and expects a return on investment of 14%. The markup on absorption cost for this product would be: a. 14% b. 52.7% c. 51.7% d. 65.7%
Ladle Corporation uses the absorption costing approach to cost-plus pricing described in the text to set prices for its products. Based on budgeted sales of 81,000 units next year, the unit product cost of a particular product is $45.30. The company's selling and administrative expenses for this product are budgeted to be $1,898,000 in total for the year. The company has invested $262,000 in this product and expects a return on investment of 14%. The markup on absorption cost for this product would be: a. 14% b. 52.7% c. 51.7% d. 65.7%
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Ladle Corporation uses the absorption costing approach to cost-plus
pricing described in the text to set prices for its products. Based on
budgeted sales of 81,000 units next year, the unit product cost of a
particular product is $45.30. The company's selling and administrative
expenses for this product are budgeted to be $1,898,000 in total for the
year. The company has invested $262,000 in this product and expects a
return on investment of 14%.
The markup on absorption cost for this product would be:
a. 14%
b. 52.7%
c. 51.7%
d. 65.7%
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