Diedrich Corporation Makes a Product with the Following Costs

question 389

Multiple Choice

Diedrich Corporation makes a product with the following costs: The company uses the absorption costing approach to cost-plus pricing described in the text. The pricing calculations are based on budgeted production and sales of 67,000 units per year.The company has invested $420,000 in this product and expects a return on investment of 12%.Direct labor is a variable cost in this company.The selling price based on the absorption costing approach is closest to:

• A) $83.80
• B) $56.32
• C) $84.56
• D) $126.53

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Definitions:

Psychological Disorder

A pattern of behavioral or psychological symptoms that impact multiple areas of life and create distress for the person affected.

Population

The whole number of people or inhabitants in a country or region.

Percentage

A mathematical term describing a number or ratio expressed as a fraction of 100, used to quantify relative change or differences.

Obsession

Persistent, intrusive, and unwelcome thoughts or impulses that cause significant anxiety or distress.