Goda Concepts Ltd. uses the Absorption costing approach to 'cost-plus pricing' to set prices for its products. Based on budgeted sales of 86,000 units next year, the unit product cost of a new product is $81.60. The company's selling, general, and administrative expenses for this product are budgeted to be $1,247,000 in total for the year. The company will invest $360,000 in this product and expects a return on investment of 12%.

Required:

a)Calculate the mark-up % on the Absorption cost for this product.

b. Prepare Goda's Income Statement which proves your mark-up % calculate above is accurate.

c. List three (3) things that Goda's management should consider before committing to this new product.

d. Goda also wants to introduce a new calculator. To compete effectively, the calculator can't be priced at more than $40. Goda requires a 20% rate of return on investment on all newproducts. In order to produce and sell 30,000 calculators each year, the company would have to make an investment of $850,000. What would be the Target Cost per calculator?