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What is the target selling price under absorption cost pricing? (not variable) a. $127.50 b....

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Accounting

What is the target selling price under absorption cost pricing? (not variable)
a. $127.50
b. $135.50
c. $140.25
d. $145.95 image
*P22-7A Stent Corporation needs to set a target price for its newly designed product EverReady. The following data relate to this new product. Per Unit Total Direct materials $20 Direct labor $40 Variable manufacturing overhead $10 Fixed manufacturing overhead $1,600,000 Variable selling and administrative expenses $ 5 Fixed selling and administrative expenses $1,120,000 The costs shown above are based on a budgeted volume of 80,000 units produced and sold each year. Stent uses cost-plus pricing methods to set its target selling price. Because some managers prefer absorption-cost pricing and others prefer variable-cost pricing, the account ing department provides information under both approaches using a markup of 50% on absorption cost and a markup of 80% on variable cost

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