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Rensing Corporation

Price: $1.99

Rensing Corporation produces outdoor portable fireplace units. The following per
unit cost information is available: direct materials $20; direct labor $25; variable manufacturing
overhead $14; fixed manufacturing overhead $21; variable selling and administrative
expenses $9; and fixed selling and administrative expenses $11. The company’s ROI
per unit is $20.

Compute Rensing Corporation’s markup percentage using (a) absorption-cost pricing and
(b) variable-cost pricing.

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