Diehl Company Makes a Product with the Following Costs

Multiple Choice

Diehl Company makes a product with the following costs: The company uses the absorption costing approach to cost-plus pricing described in the text. The pricing calculations are based on budgeted production and sales of 52,000 units per year.
The company has invested $420,000 in this product and expects a return on investment of 8%.
Direct labor is a variable cost in this company.
-The markup on absorption cost is closest to:

A) 37.2%
B) 8.0%
C) 102.4%
D) 38.4%