Kirsch, Inc

Multiple Choice

Kirsch, Inc., manufactures a product with the following costs: 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 41,000 units per year. The company has invested $540,000 in this product and expects a return on investment of 13%.
The selling price based on the absorption costing approach would be closest to:

A) $95.43
B) $72.31
C) $41.50
D) $70.60