Eakins Corporation Has Just Developed a New Product

Multiple Choice

Eakins Corporation has just developed a new product.At an expected sales level of 60, 000 units per year, the company anticipates that the following costs will be incurred: Eakins Corporation uses the absorption costing approach to cost-plus pricing as described in the text. The new product would require an investment of $1, 200, 000 on which the company would like to earn a return of 22 percent.The markup using the absorption costing approach would be:

A) 93.8%
B) 32.6%
C) 71.3%
D) 57.5%