Raymond Company Estimates That an Investment of $800,000 Would Be

Multiple Choice

Raymond Company estimates that an investment of $800,000 would be necessary to produce and sell 40,000 units of Product S each year. Costs associated with the new product would be: The company requires a 20% return on the investment in all products. The company used the absorption costing approach to cost-plus pricing as described in the text.
-The selling price based on the absorption costing approach would be:

A) $48.38
B) $56.25
C) $52.50
D) $51.38