Eckert Company Uses the Absorption Costing Approach to Cost-Plus Pricing

Multiple Choice

Eckert Company uses the absorption costing approach to cost-plus pricing to set prices for its products. Based on budgeted sales of 18,000 units next year, the unit product cost of a particular product is $60.40. The company's selling, general, and administrative expenses for this product are budgeted to be $370,800 in total for the year. The company has invested $260,000 in this product and expects a return on investment of 11%.
- The markup on absorption cost for this product would be closest to which of the following?

A) 11.0%.
B) 34.1%.
C) 36.7%.
D) 45.1%.