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17 October, 08:41

The following costs relate to Tower Company:

Variable manufacturing cost, $30; variable selling and administrative cost, $8; applied 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:

A) $30. B) $38. C) $45. D) $57. E) some other amount.

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  1. 17 October, 09:27
    0
    The correct answer is C.

    Explanation:

    Giving the following information:

    Variable manufacturing cost, $30

    Applied fixed manufacturing overhead, $15

    Under the absorption costing method, the unitary product cost is calculated using the variable manufacturing cost and allocated fixed overhead.

    Unitary product cost = 30 + 15 = $45
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