artin Company uses the absorption costing approach to cost-plus pricing. It is considering the introduction of a new etermine a selling price, the company gathered the following information: Number of units to be produced and sold each year. Unit product cost 12,000 $26.00 $ 26,400 $ 300,000 12% Estimated annual selling and administrative expenses Estimated investment required by the company Desired return on investment (ROI) equired: . Compute the markup percentage on absorption cost required to achieve the desired ROI. . Compute the selling price per unit. Note: Do not round intermediate calculations. Round your answer to 2 decimal places.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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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 gathered the following information:
Number of units to be produced and sold each year
Unit product cost
Estimated annual selling and administrative expenses
Estimated investment required by the company
Desired return on investment (ROI)
Required:
1. Compute the markup percentage on absorption cost required to achieve the desired ROI.
2. Compute the selling price per unit.
Note: Do not round intermediate calculations. Round your answer to 2 decimal places.
1. Markup percentage on absorption cost
2. Selling price per unit
12,000
$26.00
$ 26,400
$ 300,000
12%
%
Transcribed Image Text: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 gathered the following information: Number of units to be produced and sold each year Unit product cost Estimated annual selling and administrative expenses Estimated investment required by the company Desired return on investment (ROI) Required: 1. Compute the markup percentage on absorption cost required to achieve the desired ROI. 2. Compute the selling price per unit. Note: Do not round intermediate calculations. Round your answer to 2 decimal places. 1. Markup percentage on absorption cost 2. Selling price per unit 12,000 $26.00 $ 26,400 $ 300,000 12% %
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