Hill Metal Company is considering to set the selling price of a product that has just undergone some design specifications. The accounting department has provided cost estimates for the redesigned product as shown below:

Per unit Total

Direct materials $12

Direct labor 8

Variable manufacturing overhead 6

Fixed manufacturing overhead $140,000

Variable selling and administrative expenses 4

Fixed selling and administrative expenses $120,000

Additional information:

Number of units produced and sold each year 20,000

Desired return on investment (ROI) 20%

Estimated investment required $200,000

Required:

a. Compute the unit product cost

b. Compute the markup required to achieve the desired ROI

c. Compute the target selling price per unit