Marvel Corporation estimates that the following costs and activity would be associated with the manufacture and sale of product Y: Number of units sold annually 20,000 Required investment in assets$400,000 Unit product cost$25 Selling and administrative expenses$130,000 ?If the company uses the absorption costing approach to cost-plus pricing described in the text and desires a 15% rate of return on investment (ROI), the required markup on absorption cost for product Y would be:
A. 26%
B. 38%
C. 12%
D. 15%
Answer: B
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