Why the hit company uses absorption costing


HIT Company provides the following cost information related to its production of its primary product: Per Unit

  • Variable manufacturing cost.......................... $40
  • Fixed manufacturing cost.............................. 40
  • Variable selling and administrative expenses...... 10
  • Fixed selling and administrative expenses......... 12
  • Desired ROI per unit..................................... 14

What is the markup percentage, assuming that HIT Company uses absorption (product) costing?

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Accounting Basics: Why the hit company uses absorption costing
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