The following data pertain to Lomax Enterprises: $$\begin{array} { l r }
\text { Variable manufacturing cost } & \$ 70 \
\text { Variable selling and administrative cost } & 20 \
\text { Applied fixed manufacturing cost } & 40 \
\text { Allocated fixed selling and administrative cost } & 15
\end{array}$$ What price will the company charge if the firm uses cost-plus pricing based on absorption manufacturing cost and a markup percentage of 110%?
A) $84.
B) $147.
C) $210.
D) $231.
E) None of the other answers are correct.

Question

The following data pertain to Lomax Enterprises: $$\begin{array} { l r } 
\text { Variable manufacturing cost } & \$ 70 \
\text { Variable selling and administrative cost } & 20 \
\text { Applied fixed manufacturing cost } & 40 \
\text { Allocated fixed selling and administrative cost } & 15
\end{array}$$ What price will the company charge if the firm uses cost-plus pricing based on absorption manufacturing cost and a markup percentage of 110%?
A) $84.
B) $147.
C) $210.
D) $231.
E) None of the other answers are correct.

Quizplus · Accepted Answer

The absorption manufacturing cost is the sum of variable manufacturing cost and applied fixed manufacturing cost, which is $70 + $40 = $110. With a markup of 110%, the price is $110 + (110% of $110) = $231.

The Following Data Pertain to Lomax Enterprises What Price Will the Company Charge If the Firm Uses