(Appendix 12A) Marvel Company estimates that the following costs and activity would be associated with the manufacture and sale of one unit of product Y:

Number of Units Sold Annually	20,000
Required Investment	$400,000
Unit Product Cost	$25
Selling, General, and Administrative Expenses	$130,000

If the company uses the absorption costing approach to cost-plus pricing and desires a 15% rate of return on investment (ROI), what would be the required markup on absorption cost for product Y?

Multiple Choice

• 12%.

• 15%.

• 26%.

• 38%.