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Save Homework: Chapter 3 - Pricing Decisions Homework Score: 0.96 of 5 pts 4 of 4 (2 complete) W P13-29 (similar to) HW Score: 25.84%, 3.62 of 14 pts 13 Question Help Simply Snacks makes candy bars for vending machines and sells them to vendors in cases of 30 bars. Although Simply Snacks makes a variety of candy, the cost differences are insignificant, and the cases all sell for the same price. Simply Snacks has a total capital investment of $18,000,000. It expects to produce and sell 750,000 cases of candy next year. Simply Snacks requires a 12% target return on investment. Expected costs for next year are: (Click the icon to view the costs.) Data Table Simply Snacks prices the cases of candy at full cost plus markup to generate profits equal to the target return on capital. $3.00 per case $1.00 per case $4,440,000 $500,000 $400,000 Read the requirements. Variable production costs Requirement 1. What is the target operating income? (Enter the percentage as a whole number.) Variable marketing and distribution costs Capital investment X Target return on investment = Target operating income Fixed production costs $ 18,000,000 12 % - $ 2,160,000 Fixed marketing and distribution costs Other fixed costs Requirement 2. What is the selling price Simply Snacks needs to charge to eam the target operating income? Calculate Begin by calculating the target revenues by working backwards from the target operating income. Target revenues 13320000 Requirements Variable costs 4440000 Contribution margin Fixed costs 1. What is the target operating income? 2. What is the selling price Simply Snacks needs to charge to earn the target operating 2160000 Target operating income income? Calculate the markup percentage on full cost. 3. Simply Snacks is considering increasing its selling price to $15 per case. Assuming production and sales decrease by 6%, calculate Simply Snacks' return on investment. Is increasing the selling price a good idea? - X Enter any number in the edit fields and then click Check Answer. Print Done parts remaining

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