The management of Musselman Corporation would like to set the selling price on a new product using the absorption costing approach to cost-plus pricing. The company's accounting department has supplied the following estimates for the new product: Management plans to produce and sell 9,000 units of the new product annually. The new product would require an investment of $1,305,000 and has a required return on investment of 10%.
The absorption costing unit product cost is:
A) $51
B) $54
C) $75
D) $86

Question

The management of Musselman Corporation would like to set the selling price on a new product using the absorption costing approach to cost-plus pricing. The company's accounting department has supplied the following estimates for the new product:  Management plans to produce and sell 9,000 units of the new product annually. The new product would require an investment of $1,305,000 and has a required return on investment of 10%.
The absorption costing unit product cost is:
A) $51 
B) $54 
C) $75 
D) $86

Quizplus · Accepted Answer

11eacbfc_c835_13b1_8ffe_d5c6be7138ac_TB7552_00

The Management of Musselman Corporation Would Like to Set the Selling