Target prices, target costs. Hogan Ltd. is about to introduce a new product to the market.

Hogan has established a target 40% return on sales. The costs of the new product are 2.T otal product cost peru nit, lam estimated as follows:

Hogan has received an order for 15,000 units of this product at a price of $70 per unit.

REQUIRED 1. At a price of $70, what is the target cost per unit?: 2. What is the total profit from the order assuming full product costing?

3. What would be the profit if the company achieved its target cost and maintained the $70 price?
4. Should the order be accepted? Fully explain.LO1

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Direct materials per unit Direct labour per unit $16 $12 Variable overhead per unit $18 Fixed overhead applied per unit $15