## Description

Please see attachments. I need the answers for all the questions attached.

Martin Company 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 | 19,500 | ||

Unit product cost | $ | 50 | |

Projected annual selling and administrative expenses | $ | 66,000 | |

Estimated investment required by the company | $ | 340,000 | |

Desired return on investment (ROI) | 21 | % | |

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

**Required:**

1. Compute the markup required to achieve the desired ROI. **((Round your final answer to 2 decimal places (i.e., 0.1234 should be entered as 12.34).)**

2. Compute the selling price per unit. **(Round your intermediate and final answers to 2 decimal places. )**

rev: 11_08_2018_QC_CS-147151, 11_13_2018_QC_CS-147151

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## Explanation & Answer

Attached.

Surname 1

Your name

Professor’s name

Course

Date

Homework Q 1-3

Q1 Martin Company

Exercise A-2

1.

Computation of markup required to achieve the desired ROI:

it is given that ROI is 21%, investment is $340000, selling and administrative expenses are $66000, unit

sales are 19500 and unit product cost is $50.

Markup percentage on absorption cost:

=((required ROI * Investment) + Selling and administrative expenses) / (Unit sales *Unit product cost)

=((0.21 * 340000) + 66000)/(19500*50)

=0.14

2.

Computation of selling price per unit:

it is given that product price is $50 and markup is 14%

selling price per unit = product price + markup

= 50 + (50 * 0.14)

= $57

Hence, MC's new product selling price is $57

Q2: Postal services

Pr...