Eckert Company Uses the Absorption Costing Approach to Cost-Plus Pricing

question 135

Multiple Choice

Eckert Company uses the absorption costing approach to cost-plus pricing to set prices for its products. Based on budgeted sales of 18,000 units next year, the unit product cost of a particular product is $60.40. The company's selling, general, and administrative expenses for this product are budgeted to be $370,800 in total for the year. The company has invested $260,000 in this product and expects a return on investment of 11%.
- The target selling price based on the absorption costing approach for this product would be closest to which of the following?

• A) $67.04.
• B) $81.00.
• C) $82.59.
• D) $110.76.

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