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What the selling price based on the absorption costing

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Reference no: EM133047028

Question - Modern Co makes a product with the following costs:

Per Unit Per Year

Direct materials 20, 8

Direct labor (variable cost) 15, 2

Variable manufacturing overhead 1, 3

Variable selling and administrative expenses 4, 2

Fixed manufacturing overhead 1.25 2.900 py

Fixed selling and administrative expenses 1.581.200 py

The company uses the absorption costing approach to cost-plus pricing. The pricing calculations are based on budgeted production and sales of 67,000 units per year. The company has invested $420,000 in this product and expects a return on investment of 12%.

Required - What the selling price based on the absorption costing approach?

Reference no: EM133047028

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