Eckhart Company Uses the Absorption Costing Approach to Cost-Plus Pricing

Multiple Choice

Eckhart Company uses the absorption costing approach to cost-plus pricing as described in the text to set prices for its products. Based on budgeted sales of 64,000 units next year, the unit product cost of a particular product is $13.60. The company's selling and administrative expenses for this product are budgeted to be $729,600 in total for the year. The company has invested $460,000 in this product and expects a return on investment of 11%.
-The selling price based on the absorption costing approach for this product would be closest to:

A) $25.00
B) $25.79
C) $15.10
D) $47.41