The Management of Musselman Corporation Would Like to Set the Selling

question 18

Multiple Choice

The management of Musselman 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 9,000 units of the new product annually. The new product would require an investment of $1,305,000 and has a required return on investment of 10%.
-The selling price would be closest to:

• A) $28.71
• B) $26.50
• C) $22.00
• D) $32.67

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