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Diedrich Corporation makes a product with the following costs: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Variable selling and administrative expenses Fixed
Diedrich Corporation makes a product with the following costs: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Variable selling and administrative expenses Fixed selling and administrative expenses Per Unit Per Year $19.10 $ 12.40 $ 4.90 $940,100 $ 1.00 $ 890,000 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 79,000 units per year. The company has invested $490,000 in this product and expects a return on investment of 18%. Direct labor is a variable cost in this company. The markup on absorption cost is closest to: (Round your intermediate calculations to 2 decimal places and final answer to 1 decimal place.) Multiple Choice 277% o 74.4% o 25.4% o 18.0%
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