Kirby, Inc

Multiple Choice

Kirby, 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 19,000 units per year.
The company has invested $580,000 in this product and expects a return on investment of 14%.
The selling price based on the absorption costing approach would be closest to:

A) $74.30
B) $56.11
C) $96.50
D) $78.57