The management of Kizer 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 8, 000 units of the new product annually.The new product would require an investment of $1, 580, 000 and has a required return on investment of 10%. The absorption costing unit product cost is:
A)$59
B)$86
C)$55
D)$75

Question

The management of Kizer 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 8, 000 units of the new product annually.The new product would require an investment of $1, 580, 000 and has a required return on investment of 10%. The absorption costing unit product cost is:
A)$59 
B)$86 
C)$55 
D)$75

Quizplus · Accepted Answer

The Answer of The management of Kizer 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 8, 000 units of the new product annually.The new product would require an investment of $1, 580, 000 and has a required return on investment of 10%. The absorption costing unit product cost is:
A)$59 
B)$86 
C)$55 
D)$75

The Management of Kizer Corporation Would Like to Set the Selling