Morales Corporation produces microwave units. The following per unit cost information is available:

Direct materials	$38
Direct labor	$23
Variable manufacturing overhead	$12
Fixed manufacturing overhead	$39
Variable selling and administrative expenses	$10
Fixed selling and administrative expenses	$23

Part 1

Morales Corporation must invest $500,000 to produce and market 100,000 microwave ovens. The desired ROI is 30%.

1. Calculate the markup percentage using absorption cost pricing.
2. Calculate the target selling price based on the markup percentage using absorption cost pricing.

Part 2

Morales Corporation must invest $150,000 to produce and market 20,000 microwave ovens. The desired ROI is 10%.

1. Calculate the markup percentage using total variable cost pricing.
2. Calculate the target selling price based on the markup percentage using total variable cost pricing.