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:

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		6,000
Unit product cost	$	50
Estimated annual selling and administrative expenses	$	24,000
Estimated investment required by the company	$	300,000
Desired return on investment (ROI)		12	%

Required:

1. Compute the markup percentage on absorption cost required to achieve the desired ROI.

2. Compute the selling price per unit.

 

Thanks