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Chill Out, a manufacturer of outdoor patio heaters, realizes a cost of $75 for every heater it produces. Total fixed costs equal $3 million. If the company manufactures 1 million heaters, compute the following:
a. unit cost
b. markup price if the company desires a 15% return on sales
c. ROI price if the company desires a 20% return on an investment of $10 million
Hint: Apply unit cost, markup price, and ROI formulas.
Note: To receive full credit, include the analytical equations or an explanation of the formulas used to determine your answers.
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