Diehl Company Makes a Product with the Following Costs

Multiple Choice

Diehl Company makes 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 52,000 units per year.
The company has invested $420,000 in this product and expects a return on investment of 8%.
Direct labor is a variable cost in this company.
-The selling price based on the absorption costing approach is closest to:

A) $78.50
B) $54.10
C) $79.15
D) $108.62