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The management of Musselman Corporation would like to set the selling price on a new product using the absorption costing approach to cost-plus pricing.
The management of Musselman Corporation would like to set the selling price on a new product using the absorption costing approach to cost-plus pricing. The company's accounting department has supplied the following estimates for the new product: Direct materials Direct labor Variable manufacturing overhead Fixed annual manufacturing overhead Variable selling and administrative expenses Fixed annual selling and administrative expenses Per Unit Per Year $ 27 $ 16 $ 8 $ 216,000 $ 3 $ 72,000 Management plans to produce and sell 9,000 units of the new product annually. The new product would require an Investment of $1,305,000 and has a required return on investment of 10%. The markup percentage on absorption cost is closest to:
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