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

Multiple Choice

(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?

A) 16%.
B) 22%.
C) 29%.
D) 41%.