ChocAttack makes candy bars for vending machines and sells them to vendors in cases of 30 bars. Although ChocAttack makes a variety of candy, the cost differences are insignificant, and the cases all sell for the same price. ChocAttack has a total capital investment of $12,000,000. It expects to produce and sell 450,000 cases of candy next year. ChocAttack requires a 12% target return on investment. Expected costs for next year are: (Click the icon to view the costs.) ChocAttack prices the cases of candy at full cost plus markup to generate profits equal to the target return on capital. Read the requirements. Capital investment $ 12,000,000 Target return on investment Target operating income 12 % = $ 1,440,000 Requirement 2. What is the selling price ChocAttack needs to charge to earn the target operating income? Calculate the markup percentage on full cost. Begin by calculating the target revenues by working backwards from the target operating income. Target revenues Variable costs Contribution margin $ 5,400,000 2,475,000 2,925,000 1,485,000 Fixed costs 1,440,000 Target operating income ChocAttack must charge $ 12 per case to earn the target operating income. Now calculate the markup percentage on full cost. Determine the formula, then compute the markup percentage. (Enter the per unit amounts to the nearest cent. Enter the markup on full costs as a percentage rounded to two decimals, X.XX%.) Markup per unit ( $ 3.20 $ Full cost per unit 8.80 ) ) Markup on full costs 36.36 % Requirement 3. ChocAttack is considering increasing its selling price to $13 per case. Assuming production and sales decrease by 6%, calculate ChocAttack's return on investment. Is increasing the selling price a good idea? Begin by calculating the new target operating income. Target revenues Variable costs Contribution margin Fixed costs Target operating income Data table - Requirements Variable production costs $4.00 per case 1. What is the target operating income? Variable marketing and distribution costs $1.50 per case Fixed production costs $435,000 Fixed marketing and distribution costs $800,000 2. What is the selling price ChocAttack needs to charge to earn the target operating income? Calculate the markup percentage on full cost. 3. ChocAttack is considering increasing its selling price to $13 per case. Assuming production and sales decrease by 6%, calculate ChocAttack's return on investment. Is increasing the selling price a good idea? Other fixed costs $250,000 Print Done Print Done -