The management of Matsuura Corporation would like to set the selling price on a new product using the absorption costing approach to cost-plus pricing. The company's accounting department has supplied the following estimates for the new product:

Management plans to produce and sell 2,800 units of the new product annually. The new product would require a return on investment of $27,200 (the required ROI x the required investment).
The unit target selling price using the absorption costing approach is closest to: (Round your answer to 2 decimal places.)
a. $130.33
b. $117.51
c. $92.13
d. $87.53

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Per Unit Per Year Direct materials $48.80 $15.80 Direct labor Variable manufacturing overhead $7.80 Fixed annual manufacturing overhead $69,440 $3.80 Variable selling and administrative expenses Fixed annual selling and administrative expenses $19,040