Ecob Corporation Uses the Absorption Costing Approach to Cost-Plus Pricing

Multiple Choice

Ecob Corporation uses the absorption costing approach to cost-plus pricing as described in the text to set prices for its products. Based on budgeted sales of 22,000 units next year, the unit product cost of a particular product is $60.80. The company's selling and administrative expenses for this product are budgeted to be $375,600 in total for the year. The company has invested $300,000 in this product and expects a return on investment of 9%.The markup on absorption cost for this product would be closest to: (Do not round intermediate calculations.)

A) 26.1%
B) 30.1%
C) 9.0%
D) 28.1%