Simmons Corporation Estimated That the Following Costs and Activity Would

question 13

Multiple Choice

Simmons Corporation estimated that the following costs and activity would be associated with Product T: If the company uses the absorption costing approach to cost-plus pricing described in the text and desires a 20% ROI,the selling price for Product T would be:
$\begin{array}{lr}\text { Number of units sold annually ............................ } & 80,000 \\\text { Required investment............................... } & \$ 900,000 \\\text { Unit product cost........................... } & \$ 35\\\text { Selling and administrative expenses................... } & \$ 600,000\end{array}$

• A)$37.25
• B)$38.75
• C)$42.00
• D)$44.75

Comprehend the principles of employee benefits, including vacation, health insurance, and retirement contributions.

Understand the concepts of liabilities, including current, contingent, and unearned revenues.

Learn about the various types of allowances and their effects on taxes.

Gain insights into methods of calculating tax withholdings and understanding tax tables.

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Definitions:

Decentralization

The distribution of decision-making powers and operational activities away from a central authoritative location or group.

Advantage

A condition or circumstance that puts one in a favorable or superior position.

Cost Driver

A cost driver is a factor that causes a change in the cost of an activity, influencing the cost of production and operation in both direct and indirect cost management.

Support Department

A non-production department that provides essential services and support to the production departments and other parts of an organization.