Ally has promised Kat that she will get the same $3 per dozen commission regardless of what price the cookies sell for. This makes Allys new costs look like this:

Initial investment: $450 Fixed costs: $375 Variable costs: $3 (per dozen) Commission; $3 (per dozen) Ally is curious about what price she needs to charge to get a 60% Return on Investment (ROI) including her variable costs, initial investment and fixed costs. What price will she need to charge for a 60% ROI? For this calculation Ally is assuming sales of 900 dozen (900 units). Pay close attention to the investment and unit cost figures.

FORMULA: ROI PRICE = UNIT COST + (ROI x INVESTMENT) / UNIT SALES HINT: Make sure you include all of Allys expenses in the right category