Question: Question 4 (5 points) Buzz Company is contemplating the introduction of a new product. The company has gathered the following information concerning the product:

Question 4 (5 points) Buzz Company is contemplating the introduction of a

Question 4 (5 points) Buzz Company is contemplating the introduction of a new product. The company has gathered the following information concerning the product: Number of units to be produced and sold each year 16,000 Investment required by the company 400,000 Expected unit product cost $30 Expected annual selling, general, and administrative expenses $100,000 Desired rate of return on investment The company uses the absorption costing approach to cost-plus pricing. Required: 1. Compute the markup on absorption cost. (3 marks) 2. Compute the target selling price. (2 marks) 20%

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