Mars has total investment in capital of $13 million and expects to sell 500,000 cases of chocolate bars (30 bars in each) next year. Mars requires a 10% target ROI.

Expected costs for next year are:

Variable prodn costs: $ 3.50 per case

Variable Mking & Distb costs: $ 1.50 per case

Fixed prodn costs: $ 1,000,000

Fixed Mking & Distb costs: $ 700,000

Other fixed costs: $ 500,000

Mars prices the cases of chocolate bars at absorption full cost plus mark-up to generate profits equal to the target ROI on capital.

Following on from the workshop example (Mars), now assume the cost base is variable cost what is the mark-up and the resulting price?