The Following Information Is Available on Browning Inc The Company Uses the Absorption Costing Approach to Cost-Plus Pricing

Multiple Choice

The following information is available on Browning Inc.'s Product A: $\begin{array}{lr}\text {Number of units sold each year. }&20,000 \\\text { Selling price per unit}&\$ 96 \\\text { Unit product cost.}&\$ 60 \\\text {Investment in Product A }&\$ 500,000 \\\text {Required return on investment. }&16 \%\end{array}$ The company uses the absorption costing approach to cost-plus pricing described in the text. Based on these data, the total selling and administrative expenses each year are:

A) $720,000
B) $480,000
C) $640,000
D) $400,000