(Appendix 12A)Joeston Corporation Makes a Product with the Following Costs

Multiple Choice

(Appendix 12A) Joeston Corporation makes a product with the following costs: $\begin{array}{lccc}& \underline { \text { Per Unit } } & \underline { \text { per year} } \\\text { Direct materials } & \$ 14.70 & \\\text { Direct labour } & 14.10& \\\text { Variable manufacturing overhead } & 3.70 & \\\text { Fixed manufacturing overhead. } & & \$ 305,200 \\\text { Variable SG\&A expenses }&3.00\\\text { Fixed SG\&A expenses }&&163,800\end{array}$
The company uses the absorption costing approach to cost-plus pricing.The pricing calculations are based on budgeted production and sales of 14,000 units per year.The company has invested $540,000 in this product and expects a return on investment of 10%.The markup on absorption cost would be closest to which of the following?

A) 10.0%.
B) 27.1%.
C) 34.2%.
D) 124.2%.