If Dexter uses cost-plus pricing based on absorption cost, the markup percentage the company must use would be:
A)15.72%.
B)21.64%.
C)29.56%.
D)58.93%.

Question

Quizplus · Accepted Answer

The correct answer is A because the markup percentage is calculated as (desired profit / cost of goods sold) * 100%. In this case, the desired profit is $15,000 and the cost of goods sold is $95,000, so the markup percentage is (15,000 / 95,000) * 100% = 15.72%.

If Dexter Uses Cost-Plus Pricing Based on Absorption Cost, the Markup