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Kircher, Inc The Company Uses the Absorption Costing Approach to Cost-Plus Pricing

question 3

Multiple Choice

Kircher, Inc., manufactures a product with the following costs: $\begin{array}{lrr}&\text { Per Unit } & \text { Per Year } \\\text {Direct materials }&\$ 24.90 & \\\text {Direct labor }&\$ 13.90 & \\\text {Variable manufacturing overhead }&\$ 2.10 \\\text { Fixed manufacturing overhead. }&&\$1,182,600\\\text { Variable selling and administrative expenses }&\$2.00\\\text { Fixed selling and administrative expenses }&&\$1,166,400\end{array}$ The company uses the absorption costing approach to cost-plus pricing described in the text. The pricing calculations are based on budgeted production and sales of 81,000 units per year. The company has invested $220,000 in this product and expects a return on investment of 15%.
The selling price based on the absorption costing approach would be closest to:

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Definitions:

Microevolution

The change in the genetic makeup of a population over time, leading to the development of new species.

Biological Evolution

The process through which the characteristics of organisms change over successive generations, by means of genetic variation and natural selection.

Genetic Engineering

The direct manipulation of an organism's genes using biotechnology to modify its characteristics, often to enhance its performance or suitability for a particular purpose.

Natural Selection

A process in biological evolution where organisms with traits better suited to their environment are more likely to survive and reproduce.