Martin Company is considering the introduction of a new product. To determine a selling price, the company has gathered the following information: Number of units to be produced and sold each year Unit product cost Projected annual selling and administrative expenses Estimated investment required by the company Desired return on investment (ROI) 16,000 $ 35 $ 66,000 $ 510,000 19% The company uses the absorption costing approach to cost-plus pricing. Required: 1. Compute the markup required to achieve the desired ROI. ((Round your final answer to 2 decimal places (i.e., 0.1234 should be entered as 12.34). Markup percentage 2. Compute the selling price per unit. (Round your intermediate and final answers to 2 decimal places.) $ 35.00 Unit product cost Markup Selling price per unit $ 35.00 The postal service of St. Vincent, n island in the West Indies, obtains a significant portion of its revenues from sales of special souvenir sheets to stamp collectors. The souvenir sheets usually contain several high-value St. Vincent stamps depicting a common theme, such as the life of Princess Diana. The souvenir sheets are designed and printed for the postal service by Imperial Printing, a starp agency service company in the United Kingdom. The souvenir sheets cost the postal service $1,45 each. St. Vincent has been selling these souvenir sheets for $10,00 each and ordinarily sells about 66,000 units. To test the market, the postal service recently priced a new souvenir sheet at $11.00 and sales dropped to 56,000 units, Required: 1a. Calculate the contribution margin for sale price of $10.00 each or $11.00 each? $10.00 Price $11.00 Price Unit sales Sales Cost of goods sold Contribution margins 0 $ 0 1b. Does the postal service of St. Vincent make more money selling souvenir sheets for $10.00 each or $11.00 each? O $10.00 O $11.00 2. Estimate the price elasticity of demand for the souvenir sheets. (Negative amount should be indicated by a minus sign. Do not round intermediate calculations. Round your answer to 4 decimal places.) Price elasticity of demand 3. Estimate the profit-maximizing price for acuvenir sheets. (Do not round intermediate calculations. Round your answer to 2 decimal places.) Profil-maximizing price |