Dexter, Inc

Multiple Choice

Dexter, Inc. manufactures various lines of computer equipment and is planning to introduce a new line of laptops. Current plans call for the production and sale of 1,000 units, with estimated costs as follows: The average amount of capital invested in the laptop product line is $900,000 and Dexter's target return on investment is 18%.
If Dexter uses cost-plus pricing based on absorption cost, the markup percentage the company must use would be:

A) 15.72%.
B) 21.64%.
C) 29.56%.
D) 58.93%.
E) none of the other answers are correct.