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Nana76 [90]
3 years ago
15

The following costs relate to Tower Company: Variable manufacturing cost, $30; variable selling and administrative cost, $8; app

lied fixed manufacturing overhead, $15; and allocated fixed selling and administrative cost, $4. If Tower uses absorption manufacturing-cost pricing formulas, the company's markup percentage would be computed on the basis of: None of the answers is correct. $38. $45. $57. $30.
Business
1 answer:
olganol [36]3 years ago
4 0

Answer:

the company's markup percentage would be computed on the basis of: $45

Explanation:

Absorption Costing Treats Both the <em>Variable</em> and <em>Fixed</em> Manufacturing Costs as Product Costs.Non- Manufacturing Cost are treated as Period Costs or Expenses in period in which they are incurred.

Absorption manufacturing-cost pricing formulas establishes the <em>selling prices</em> of items by adding a <em>mark-up </em>on top of the absorption cost.

<u>Absorption Cost Calculation for Product Costing is as follows</u> :

Variable manufacturing cost     $30

Fixed manufacturing overhead $15

Total Cost                                   $45

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With Mr Peabody's income and other financial constraints, the optimal average level of money will be the most he can maximise from managing his money.

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