Question
Martin Company uses the absorption costing approach to cost-plus pricing. It is considering the introduction of a new product. To determine a selling price, the
Martin Company uses the absorption costing approach to cost-plus pricing. It 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 16,000 Unit product cost $ 12 Estimated annual selling and administrative expenses $ 33,500 Estimated investment required by the company $ 290,000 Desired return on investment (ROI) 5 % Required: 1. Compute the markup percentage on absorption cost required to achieve the desired ROI. 2. Compute the selling price per unit.
1.Markup percentage on absorption cost%
2.Selling price per unit
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