Dickson Corporation makes 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 60, 000 units per year. The company has invested $320, 000 in this product and expects a return on investment of 15%.
Direct labor is a variable cost in this company.
The selling price based on the absorption costing approach is closest to:
A)$85.28
B)$84.50
C)$110.89
D)$56.95

Question

Dickson Corporation makes 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 60, 000 units per year. The company has invested $320, 000 in this product and expects a return on investment of 15%.
Direct labor is a variable cost in this company.
The selling price based on the absorption costing approach is closest to:
A)$85.28 
B)$84.50 
C)$110.89 
D)$56.95

Quizplus · Accepted Answer

The Answer of Dickson Corporation makes 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 60, 000 units per year. The company has invested $320, 000 in this product and expects a return on investment of 15%.
Direct labor is a variable cost in this company.
The selling price based on the absorption costing approach is closest to:
A)$85.28 
B)$84.50 
C)$110.89 
D)$56.95

Dickson Corporation Makes a Product with the Following Costs