Document1 - Microsoft Word Review View A A A & Signature Line - Chart Hyperlink Bookmark Cross-reference F% Date & Time Header Footer Page Text Quick WordArt Drop Number Box . Parts . Cap . "&i Object - Equation Symbol Links Header & Footer Text Symbols $5,625,000. Required: a. The company currently uses the cost-plus pricing method. Compute the mark-up percentage and target selling price that will allow the company to earn its desired ROI of 28% for the coming year.[5 marks] Click or tap here to enter text. b. Based on a recent marketing research, the senior management has an optimistic sales expectation of 20,000 units and predicts to earn a higher ROI of 31%. Compute new mark-up percentage and new target selling price that will allow the company to earn its new desired ROI.[5 marks] Click or tap here to enter text. c. Another cost-based approach to pricing is called time and material pricing. Under this approach, two pricing rates are set. Explain where this approach is used and identify the steps involved in time-and-material pricing. Also explain why this approach is used in some industries.[4 marks] Click or tap here to enter text. ------ End of the Assessment Document + 11 O Hi ns prt sc 10 112 8 19 144 f5 6 $7 + % & 8 9 5 6Document1 - Microsoft Word Review View A A A Signature Line . 5% Date & Time art Hyperlink Bookmark Cross-reference Header Footer Page Text Quick WordArt Drop Number . Cap . "Object - Equation Symbol Box . Parts . Links Header & Footer Text Symbols Question 5: (14 marks) Fitness Wat Pty Ltd manufactures and distributesfitness smart watches. The company has used an absorption product costing system, which means that both variable and fixed overhead are included in the product cost. Cost estimates for a smart watch and predicted production volume for the coming year are as follows: Per Unit Total Direct materials $90 Direct labour $45 Variable manufacturing overhead $32 Variable selling and administrative expenses $33.8 Fixed selling and administrative expenses $855,000 Fixed manufacturing overhead $1,035,000 Expected volume of production (units): 18,500 Senior management expects to earn a rate of return (ROI) of 28% on their invested assets of $5,625,000. Required: a. The company currently uses the cost-plus pricing method. Compute the mark-up percentage and target selling price that will allow the company to earn its desired ROI of 28% for the coming year.[5 marks] Click or tap here to enter text. hp ins 8 10 $7 DDI 12 144 + & 6 7 8 9