Magney, Incorporated, Uses the Absorption Costing Approach to Cost-Plus Pricing

question 34

Multiple Choice

Magney, Incorporated, uses the absorption costing approach to cost-plus pricing described in the text to set prices for its products. Based on budgeted sales of 43,000 units next year, the unit product cost of a particular product is $62.00. The company's selling and administrative expenses for this product are budgeted to be $820,000 in total for the year. The company has invested $490,000 in this product and expects a return on investment of 11%.The selling price for this product based on the absorption costing approach would be closest to: (Do not round intermediate calculations.)

• A) $82.32
• B) $120.18
• C) $68.82
• D) $81.07

---

Definitions:

Essay Method

A performance appraisal technique where evaluators write a narrative description of an employee's strengths, weaknesses, and potential.

Behaviourally Anchored Rating Scale

A performance appraisal method that uses specific examples of behavior to rate employees, making the evaluation more objective and transparent.

Graphic Rating Scale

A graphic rating scale is a method used in performance appraisals where an employee's performance is rated on a scale, typically ranging from poor to excellent, across various categories.

Forced-Choice Method

A trait approach to performance rating that requires the rater to choose from statements designed to distinguish between successful and unsuccessful performance.