(Appendix 12A)The Sloan Company must invest $120,000 to produce and market 16,000 units of Product X each year.Other cost information regarding Product X is as follows: $\begin{array}{lccc}
& \underline { \text { Per Unit } } & \underline { \text { Total } } \
\text { Direct materials } & \$ 7 & \
\text { Direct labour } & 5& \
\text { Variable manufacturing overhead } & 4 & \
\text { Fixed manufacturing overhead. } & - & \$ 80,000 \
\text { Variable selling, general, and } & & \
\text { administrative expense } & 3 & \
\text { Fixed selling, general, and } & & \
\text { administrative expense } & - & \$ 72,000
\end{array}$
If Sloan Company requires a 15% return on investment,what would be the markup percentage on absorption cost for Product X,rounded to the nearest percent?

Question

(Appendix 12A)The Sloan Company must invest $120,000 to produce and market 16,000 units of Product X each year.Other cost information regarding Product X is as follows: $\begin{array}{lccc}
& \underline { \text { Per Unit } } & \underline { \text { Total } } \
\text { Direct materials } & \$ 7 & \
\text { Direct labour } & 5& \
\text { Variable manufacturing overhead } & 4 & \
\text { Fixed manufacturing overhead. } & - & \$ 80,000 \
\text { Variable selling, general, and } & & \
\text { administrative expense } & 3 & \
\text { Fixed selling, general, and } & & \
\text { administrative expense } & - & \$ 72,000
\end{array}$
 If Sloan Company requires a 15% return on investment,what would be the markup percentage on absorption cost for Product X,rounded to the nearest percent?

Quizplus · Accepted Answer

The Answer of (Appendix 12A)The Sloan Company must invest $120,000 to produce and market 16,000 units of Product X each year.Other cost information regarding Product X is as follows: $\begin{array}{lccc}
& \underline { \text { Per Unit } } & \underline { \text { Total } } \
\text { Direct materials } & \$ 7 & \
\text { Direct labour } & 5& \
\text { Variable manufacturing overhead } & 4 & \
\text { Fixed manufacturing overhead. } & - & \$ 80,000 \
\text { Variable selling, general, and } & & \
\text { administrative expense } & 3 & \
\text { Fixed selling, general, and } & & \
\text { administrative expense } & - & \$ 72,000
\end{array}$
 If Sloan Company requires a 15% return on investment,what would be the markup percentage on absorption cost for Product X,rounded to the nearest percent?

(Appendix 12A)The Sloan Company Must Invest $120,000 to Produce and Market