The following costs relate to Southside Company: Variable manufacturing cost, $30; variable selling and administrative cost, $8; applied fixed manufacturing overhead, $15; and allocated fixed selling and administrative cost, $4. If Southside uses absorption manufacturing-cost pricing formulas, the company's markup percentage would be computed on the basis of:
A) $30.
B) $38.
C) $45.
D) $57.
E) none of the other answers are correct.

Question

Quizplus · Accepted Answer

Absorption manufacturing-cost pricing formulas are based on the total manufacturing cost, which includes both variable and fixed manufacturing costs. In this case, the total manufacturing cost is $30 + $15 = $45.

The Following Costs Relate to Southside Company: Variable Manufacturing Cost