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1. Genius Professor Mullen Co. is using the Target Cost approach on a new product. Information gathered so far reveals: Expected annual sales (Market Sales)400,000
1. Genius Professor Mullen Co. is using the Target Cost approach on a new product. Information gathered so far reveals: Expected annual sales (Market Sales)400,000 units Desired profit per unit (DP) Target cost (TC) $0.25 $168,000 What is the Market Price (MP) per unit? A) $0.42 B) S0.50 C) $0.25 D) $0.67 2. Lao Shu Bruce Inc. plans to introduce a new product and is using the target cost approach. Projected sales revenue is S810,000 (MP) (S4.50 per unit) and target costs (TC) are $729,000. What is the desired profit (DP) per unit? A) $0.45 B) $2.25 C) $4.05 D) None of the above 3. Professor Mullen's Excellent Suit Co. has received a shipment of suits that cost $150 each. If the company uses cost-plus pricing and applies a markup (M/U) percentage of 60%, what is the Target Sales Price (TSP) per suit? A) $250 B) $240 C) $210 D) $375 The calculation to determine Target Cost(TC) is A) 4. B) C) D) variable manufacturing costs (V/c)+ fixed manufacturing costs (F/C). sales price (SP) - (variable manufacturing costs+ fixed manufacturing costs). variable manufacturing costs (V/C) +selling and administrative variable costs (S&A). sales price (SP) - desired profit (DP)
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