Kirgan, Incorporated, manufactures a product with the following costs:Per UnitPer YearDirect materials$ 26.00Direct labor$ 15.00Variable...
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Accounting
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 .
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