1 Stone Company is considering introducing a new line of pagers, targeting the preteen population. Stone believes that if the pagers can be priced competitively at $45, approximately 300,000 units can be sold. The controller has determined that an investment in new equipment totaling $4,000,000 will be required. Stone requires a minimum rate of return of 16% on all investments. Instructions Compute the target cost per unit of the pager. 2 Laserspot is involved in producing and selling high-end golf equipment. The company has recently been involved in developing various types of laser guns to measure yardages on the golf course. One small laser gun, called Little Laser, appears to have a very large potential market. Because of competition, Laserspot does not believe that it can charge more than $80 for LittleLaser. At this price, Laserspot believes it can sell 100,000 of these laser guns. LittleLaser will require an investment of $7,500,000 to manufacture, and the company wants an ROI of 16%. Instructions Determine the target cost for one littlelaser. Rita Corporation produces commercial fertilizer spreaders. The following information is available for Rita's anticipated annual volume of 400,000 units Per Unit Total Direct materials $32 Direct labor 54 Variable manufacturing overhead 72 Fixed manufacturing overhead $12,000,000 Variable selling and administrative expenses 34 Fixed selling and administrative expenses 7,200,000 The company has a desired ROI of 20%. It has invested assets of $120,000,000 Instructions Compute each of the following: 1 Total cost per unit 2 Desired ROI per unit Markup percentage using total cost per unit. Target selling price