Magney, Incorporated, Uses the Absorption Costing Approach to Cost-Plus Pricing

Multiple Choice

Magney, Incorporated, uses the absorption costing approach to cost-plus pricing described in the text to set prices for its products. Based on budgeted sales of 43,000 units next year, the unit product cost of a particular product is $62.00. The company's selling and administrative expenses for this product are budgeted to be $820,000 in total for the year. The company has invested $490,000 in this product and expects a return on investment of 11%.The selling price for this product based on the absorption costing approach would be closest to: (Do not round intermediate calculations.)

A) $82.32
B) $120.18
C) $68.82
D) $81.07