week 4 practice q

Martin Company is considering the introduction of a new product. To determine a selling price, the company has gathered the following information:

Number of units to be produced and sold each year		12,500
Unit product cost	$	30
Projected annual selling and administrative expenses	$	60,000
Estimated investment required by the company	$	530,000
Desired return on investment (ROI)		20	%

The company uses the absorption costing approach to cost-plus pricing.

Required:

1. Compute the markup required to achieve the desired ROI. ((Round your final answer to 2 decimal places (i.e., 0.1234 should be entered as 12.34).)

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2. Compute the selling price per unit. (Round your intermediate and final answers to 2 decimal places. )

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