Mercer Corporation estimates that an investment of $650,000 would be necessary to produce and sell 60,000 units of a new product each year. Other costs associated with the new product would be: The company requires a 25% return on the investment in all products. The company uses the absorption costing approach costing to pricing as described in the text.The selling price would be closest to:
A) $28.71
B) $26.50
C) $22.00
D) $32.67

Question

Mercer Corporation estimates that an investment of $650,000 would be necessary to produce and sell 60,000 units of a new product each year. Other costs associated with the new product would be:  The company requires a 25% return on the investment in all products. The company uses the absorption costing approach costing to pricing as described in the text.The selling price would be closest to:
A) $28.71 
B) $26.50 
C) $22.00 
D) $32.67

Quizplus · Accepted Answer

The Answer of Mercer Corporation estimates that an investment of $650,000 would be necessary to produce and sell 60,000 units of a new product each year. Other costs associated with the new product would be:  The company requires a 25% return on the investment in all products. The company uses the absorption costing approach costing to pricing as described in the text.The selling price would be closest to:
A) $28.71 
B) $26.50 
C) $22.00 
D) $32.67

Mercer Corporation Estimates That an Investment of $650,000 Would Be