brandiwingard
05.05.2020 •
Business
Diedrich Corporation makes a product with the following costs: Per Unit Per Year Direct materials $ 18.90 Direct labor $ 12.20 Variable manufacturing overhead $ 4.70 Fixed manufacturing overhead $ 900,900 Variable selling and administrative expenses $ 2.00 Fixed selling and administrative expenses $ 870,000 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 77,000 units per year. The company has invested $470,000 in this product and expects a return on investment of 16%. 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.)
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