Mercer Corporation estimates that an investment of $650,000 would be necessary to produce and sell 60,000 units of a new product each year. Other costs associated with the new product would be:Variable costs (per unit): Materials, labor, and overhead$12 Selling and administrative$3Fixed costs per year: Manufacturing overhead$360,000 Selling and administrative$300,000The company requires a 25% return on the investment in all products. The company uses the absorption costing approach costing to pricing as described in the text.The markup percentage on the new product would be closest to:
A. 12.5%
B. 24.0%
C. 59.5%
D. 51.0%
Answer: C
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