Hot-Pricing Inc. hired you as their Marketing Director. At a management meeting it was disclosed that the companys profits were down. On exploring the different possible reasons, price took centre stage among the cast of contributing variables. This led to the admission by the top executives that the company never utilised any systematic pricing approaches and thus the pricing regimes in place might need a complete overhauling. You are asked by the other board members to use the following information to give them examples of pricing for a sample product:

Sample product:

Product X

Direct costs (per unit)$20

Indirect costs$1,500,000

Total number of units to be sold250,000

Desired markup25%

Desired returns30%

Productive capital invested$750,000

Using the above information, to demonstrate cost-plus, and target returns pricing.

Please explain thoroughly