Kirgan, Incorporated, manufactures a product with the following costs:

	Per Unit	Per Year
Direct materials	$ 26.00
Direct labor	$ 15.00
Variable manufacturing overhead	$ 3.20
Fixed manufacturing overhead		$ 1,444,400
Variable selling and administrative expenses	$ 3.10
Fixed selling and administrative expenses		$ 1,415,500

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 92,000 units per year.

The company has invested $330,000 in this product and expects a return on investment of 16%.

Calculate the selling price based on the absorption costing approach .

Answer rating: 100% (QA)

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