The Management of Kizer Corporation Would Like to Set the Selling

question 58

Multiple Choice

The management of Kizer 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 8, 000 units of the new product annually.The new product would require an investment of $1, 580, 000 and has a required return on investment of 10%. The unit target selling price using the absorption costing approach is closest to:

• A)$105.75
• B)$83.33
• C)$121.50
• D)$86.00

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