GHI Retail sells a product with the following cost and pricing information:

• Variable cost per unit: $20
• Fixed costs per year: $100,000
• Expected annual sales volume: 10,000 units
• Desired annual profit: $50,000

Requirements:

1. Calculate the target cost per unit to achieve the desired profit margin.
2. Determine the selling price per unit needed to achieve the target profit margin.
3. Discuss the importance of target costing in pricing strategy for GHI Retail.
4. Analyze how changes in fixed costs and sales volume affect GHI Retail's pricing decisions.
5. Recommend pricing strategies to maximize profitability for GHI Retail.