Ecob Corporation Uses the Absorption Costing Approach to Cost-Plus Pricing

question 203

Multiple Choice

Ecob Corporation uses the absorption costing approach to cost-plus pricing as described in the text to set prices for its products. Based on budgeted sales of 19,000 units next year, the unit product cost of a particular product is $16.00. The company's selling and administrative expenses for this product are budgeted to be $250,800 in total for the year. The company has invested $440,000 in this product and expects a return on investment of 14%.The selling price based on the absorption costing approach for this product would be closest to:

• A) $59.21
• B) $29.20
• C) $32.44
• D) $18.24

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