Martin Company is considering the introduction of a new product. To determine a

Question

Martin Company is considering the introduction of a new product. To determine a selling price, the company has gathered the following information:

I keep getting 29.43% and its wrong.

Compute the markup required to achieve the desired ROI. (Round your Required ROI answers to the nearest whole percentage (i.e, 0.1234 should be entered as 12). Round your "Markup Percentage" answers to 2 decimal places (i.e., 0.1234 should be entered as 12.34.))

       

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

       

  Number of units to be produced and sold each year 11,500   Unit product cost $ 50   Projected annual selling and administrative expenses $ 72,000   Estimated investment required by the company $ 540,000   Desired return on investment (ROI) 18 %

Explanation / Answer

Net profit 97200 Fixed Costs 72000 Contribution 169200 Product Cost 575000 (11500*50) Sales 744200 (169200+575000) Total Cost 575000+72000 647000 Mark Up 97200/647000 15.02% The Markup is 15.02% Selling Price 744200/11500 $ 64.31 per unit

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