Question 4: (5 marks) (B1, C1, C2) [Pricing Decisions] The IBM Company is in the process of developing a new product called (MMA). The product current design carries with it following costs: Total variable production costs Fixed manufacturing overhead Selling Expenses General, and administrative expenses Desired Profit Cost of assets employed Total Costs 500,000 500,000 100,000 400,000 300,000 100,000 - Units to be Produced 1000,000. - On average, the company now earns a 6% return on assets (ROA). Instructions: 1. Compute the cost of one unit. (2 marks) 2. Using gross margin pricing, compute the price per unit? (4 marks) 3. Using return on assets pricing, compute the price per unit? (4 marks) 1. Total cost / units to be produced 2. Gross margin pricing method: 3. Return on assets pricing method