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 unit target selling price using the absorption costing approach is closest to:
A)$105.75
B)$83.33
C)$121.50
D)$86.00

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 unit target selling price using the absorption costing approach is closest to:
A)$105.75 
B)$83.33 
C)$121.50 
D)$86.00

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 unit target selling price using the absorption costing approach is closest to:
A)$105.75 
B)$83.33 
C)$121.50 
D)$86.00

The Management of Kizer Corporation Would Like to Set the Selling