The Management of Musselman Corporation Would Like to Set the Selling

Multiple Choice

The management of Musselman Corporation would like to set the selling price on a new product using the absorption costing approach to cost-plus pricing. The company's accounting department has supplied the following estimates for the new product: Management plans to produce and sell 9,000 units of the new product annually. The new product would require an investment of $1,305,000 and has a required return on investment of 10%.
The markup percentage on absorption cost is closest to:

A) 25%
B) 34%
C) 15%
D) 10%