2 QUESTION TWO (22 MARKS-) Compulsory Foody Corporation is a manufacturing company based in Dubai and established in 2010. It currently produces and sells three products M15, M25 and M35. Given marke research, Foody has developed a new product: M45. The company plans to sell its new product through its catalogue, which it issues monthly. The company is curity in the process of setting a selling price for a new product. The following financial data relate to this product for a budgeted volume of 60,000 units Foody st-phis pricing to set its target selling price. The mark-up on total unit cost is 40% Direct materials Direct labour Variable manufacturing overhead Fixed manufacturing overhead Variable selling and administrative expenses Fixed selling and administrative expenses Instructions 1. Compute the Target Selling Price (12Marks) $1,920,000 $2,400,000 $10 per unit $1,800,000 56 per unit $1,500,000 2. Assume the new product requires an investment of $12,000,000 to be manufactured, and the company wants to achieve ROI of 20%. Compute the NEW mark-up percentage; and the NEW Target Selling Price (10Marks) 3. Explain when the cost-plus is preferred to be used as a pricing method and its limitations (3 Bonus Marks)