The Following Information Is Available on Browning Inc The Company Uses the Absorption Costing Approach to Cost-Plus Pricing

question 68

Multiple Choice

The following information is available on Browning Inc.'s Product A:
$\begin{array}{|l|r|}\hline \text { Number of Units Sold Each Year } & 20,000 \\\hline \text { Selling Price per Unit } & \$ 96 \\\hline \text { Unit Product Cost } & \$ 60 \\\hline \text { Investment in Product A } & \$ 500,000 \\\hline \text { Required Return on Investment } & 16 \% \\\hline\end{array}$
The company uses the absorption costing approach to cost-plus pricing.Based on these data,what are the total selling,general,and administrative expenses each year?

• A) $400,000.
• B) $480,000.
• C) $640,000.
• D) $720,000.

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Definitions:

Federal Reserve Banks

Part of the central banking system of the United States, responsible for implementing monetary policy, providing financial services, and supervising and regulating banks.

Depository Institutions

Financial institutions such as banks and credit unions that accept deposits from individuals and provide loans.

Commercial Banks

Financial institutions that accept deposits, offer various loans, and provide other financial services to individuals and businesses.

Reserves

Typically refers to deposits that banks hold at the central bank plus the cash in vaults, or to the quantities of a resource (like oil or gold) that are known to be available.