Kirsch, Inc., manufactures a product with the following costs: The company uses the absorption costing approach to cost-plus pricing described in the text. The pricing calculations are based on budgeted production and sales of 41,000 units per year. The company has invested $540,000 in this product and expects a return on investment of 13%.
The selling price based on the absorption costing approach would be closest to:
A)$95.43
B)$72.31
C)$41.50
D)$70.60

Question

Kirsch, Inc., manufactures a product with the following costs:  The company uses the absorption costing approach to cost-plus pricing described in the text. The pricing calculations are based on budgeted production and sales of 41,000 units per year. The company has invested $540,000 in this product and expects a return on investment of 13%.
The selling price based on the absorption costing approach would be closest to:
A)$95.43 
B)$72.31 
C)$41.50 
D)$70.60

Quizplus · Accepted Answer

The Answer of Kirsch, Inc., manufactures a product with the following costs:  The company uses the absorption costing approach to cost-plus pricing described in the text. The pricing calculations are based on budgeted production and sales of 41,000 units per year. The company has invested $540,000 in this product and expects a return on investment of 13%.
The selling price based on the absorption costing approach would be closest to:
A)$95.43 
B)$72.31 
C)$41.50 
D)$70.60