Eakins Corporation has just developed a new product.At an expected sales level of 60, 000 units per year, the company anticipates that the following costs will be incurred: Eakins Corporation uses the absorption costing approach to cost-plus pricing as described in the text. The new product would require an investment of $1, 200, 000 on which the company would like to earn a return of 22 percent.The markup using the absorption costing approach would be:
A)93.8%
B)32.6%
C)71.3%
D)57.5%

Question

Eakins Corporation has just developed a new product.At an expected sales level of 60, 000 units per year, the company anticipates that the following costs will be incurred:  Eakins Corporation uses the absorption costing approach to cost-plus pricing as described in the text. The new product would require an investment of $1, 200, 000 on which the company would like to earn a return of 22 percent.The markup using the absorption costing approach would be:
A)93.8% 
B)32.6% 
C)71.3% 
D)57.5%

Quizplus · Accepted Answer

The Answer of Eakins Corporation has just developed a new product.At an expected sales level of 60, 000 units per year, the company anticipates that the following costs will be incurred:  Eakins Corporation uses the absorption costing approach to cost-plus pricing as described in the text. The new product would require an investment of $1, 200, 000 on which the company would like to earn a return of 22 percent.The markup using the absorption costing approach would be:
A)93.8% 
B)32.6% 
C)71.3% 
D)57.5%

Eakins Corporation Has Just Developed a New Product