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

question 7

Multiple Choice

The following information is available on Bruder Inc.'s Product A: $\begin{array}{ll}\text {Number of units sold each year. }&10,000 \\\text {Selling price per unit }&\$80 \\\text { Unit product cost.}&\$50 \\\text {Investment in Product A. }& \$400,000\\\text {Required return on investment. }&15\% \\\end{array}$
The company uses the absorption costing approach to cost-plus pricing described in the text. Based on these data, the total selling and administrative expenses each year are:

• A)$240,000
• B)$300,000
• C)$140,000
• D)$200,000

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