Medical Care, Inc., is considering what price to charge for Sparkle, a toothpaste that is sold in its leased store at a hospital. The accountant has been asked to prepare an estimated normal selling price based on the costs that Medical Care incurs in making the product in a factory it operates. Costs of producing one tube of Sparkle are 20 cents for direct materials, 10 cents for direct labor, 20 cents for variable manufacturing overhead, and 10 cents for variable selling and administrative costs. Total direct fixed costs are $10,000. The company estimates that a markup of 40% of the selling price is necessary to cover the fixed costs and provide a reasonable return on investment.

1. Calculate the estimated normal selling price.

2. Would you recommend that the company obtain any other information before establishing a sales price?