Diedrich Corporation makes a product with the following costs: Per UnitPer YearDirect materials$20.80 Direct labor$15.20 Variable manufacturing overhead$1.30 Fixed manufacturing overhead $1,252,900 Variable selling and administrative expenses$4.20 Fixed selling and administrative expenses $1,581,200 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 67,000 units per year.The company has invested $420,000 in this product and expects a return on investment of 12%.Direct labor is a variable cost in this company. The selling price based on the absorption costing approach is closest to:
A. $84.56
B. $56.32
C. $83.80
D. $126.53
Answer: A
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