Following data is given for Lander Inc. An investment worth 100,000 covers purchase of equipment and funds needed to carryinventories and accounts receivables. The company requires a 25% ROI and number of units sold is 10,000.

Per unitTotalDirect materials8Direct labour6Variable manufacturing overhead4Fixed manufacturing overhead-80,000Variable selling, general and

administrative expenses

3Fixed selling, general and

administrative expenses

-

75,000

Determine the mark-up percentage on absorption cost.

Multiple Choice

• 50%
• 30%
• 20%
• 60%