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

Multiple Choice

Eckert Corporation uses the absorption costing approach to cost-plus pricing as described in the text 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 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:

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