Naylor Company is considering the introduction of a new product. Management has gathered the following information:

Number of units to be produced and sold each year	17,500
Unit product cost	$30
Projected annual selling and administrative expenses	$74,000
Estimated investment required by the company	$390,000
Desired return on investment (ROI)	20%

The company uses the absorption costing approach to cost-plus pricing.

1.Compute the markup required to achieve the desired ROI. (Round your final answers to 2 decimal places.)

Required ROI	20	%
Investment	$390,000
Selling and administrative expenses	74,000
Total production cost	$152,000
Unit product cost per unit	$30
Unit sales	17,500
Total sales	$525,000
Markup percentage		%

2.Compute the target selling price per unit. (Do not round intermediate percentage values. Round your final answers to 2 decimal places.)

Unit product cost	$30.00
Markup	8.68
Target selling price per unit