EXERCISE A-2 Absorption Costing Approach to Setting a Selling Price [LO2] Naylor Company is considering the introduction of a new product. Management has gathered the following information: Number of units to be produced and sold each year Unit product cost.... Projected annual selling and administrative expenses Estimated investment required by the company. Desired return on investment (ROI). The company uses the absorption costing approach to cost-plus pricing. Required: 1. Compute the markup required to achieve the desired ROI. 2. Compute the target selling price per unit. 12,500 $30 $60,000 $500,000 18%