Question 14.29 14-29 Cost-plus. target return on investment pricing. Zoom-o-licious makes candy bars for vending ma- chines and sells them to vendors in cases of30 bars. Although Zoom-o-Iicious makes a variety of candy. the cost differences are insignificant. and the cases all sell for the same price. Zoomolicious has a total capital investment of $15,000,000. It expects to produce and sell sconce cases of candy next year. Zoom-o-licious requires a 10% target return on investment. Expected costs for next year are: Variable production costs $4.00 per case Variable marketing and distribution costs $1.00 per case Fixed production costs $300,000 Fixed marketing and distribution costs $400000 Either fixed costs $200,120!) Zoom-o-Iicious prices the cases of candy at full cost plus markup to generate profits equal to the target return on capital. 1. What is the target operating income? 2. What is the selling price Zoom-o-Iicious needs to charge to earn the target operating income? Calcu- late the markup percentage on full cost. 3. Zoom-o-licious's closest competitor has just increased its candy case price to $1 5, afthough it sells 36 candy bars per case. Zoom-o-licious is considering increasing its selling price to $15 per case. Assum- ing production and sales decrease by 4%. calculate Zoom-o-Iicious' return on investment ls increasing the selling price a good idea