Merced Corporation estimates that an investment of $600, 000 would be necessary to produce and sell 50, 000 units of a new product each year.Other costs associated with the new product would be: The company requires a 15% 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

Merced Corporation estimates that an investment of $600, 000 would be necessary to produce and sell 50, 000 units of a new product each year.Other costs associated with the new product would be:  The company requires a 15% 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 Merced Corporation estimates that an investment of $600, 000 would be necessary to produce and sell 50, 000 units of a new product each year.Other costs associated with the new product would be:  The company requires a 15% 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

Merced Corporation Estimates That an Investment of $600, 000 Would