36. Bond Co. is using the target cost approach on a new product. Information gathered so far reveals: Expected annual sales 400,000 units Desired profit per unit $0.35 Target cost $168,000 What is the target selling price per unit? a. $0.42 b. $0.70 c. $0.35 d. $0.77 I 37. Ans: d, LO: 1, Bloom: AP. Difficulty: Medium, Min: 2. AACSB: Analytic, AICPA BB: Marketing/Client Focus, AICPA FN: Measurement, AICPA PC: Problem Solving/Decision Making, IMA: Business Economics Well Water Inc. wants to produce and sell a new flavored water. In order to penetrate the market, the product will have to sell at $2.00 per 12 oz. bottle. The following data has been collected: Annual sales 50,000 bottles Projected selling and administrative costs $8,000 Desired profit $70,000 The target cost per bottle is a. $0.44. b. $0.60. c. $0.16. d. $0.40. 38. Larry Cable Inc. plans to introduce a new product and is using the target cost approach. Projected sales revenue is $810,000 ($4.05 per unit) and target costs are $730,000. What is the desired profit per unit? a. $0.40 b. $2.03 c. $3.65 None of the above Ans: a, LO: 1, Bloom: AP, Difficulty: Medium, Min: 2, AACSB: Analytic, AICPA BB: Marketing/Client Focus, AICPA FN: Measurement, AICPA PC: Problem Solving/Decision Making. IMA: Business Economics 39. Wasson Widget Company is contemplating the production and sale of a new widget. Projected sales are $300,000 (or 75,000 units) and desired profit is $36,000. What is the target cost per unit? a. $4.00 b. $3.52 c. $4.48 d. $4.80 40. + FRY 0-9 Boomer Boombox Inc. wants to produce and sell a new lightweight radio. Desired profit per unit is $1.84. The expected unit sales price is $22 based on 10,000 units. What is the total target cost? a. $201,600 b. $220,000 c. $18,400 d. $238,400 43. Bellingham Suit Co. has received a shipment of suits that cost $200 each. If the company uses cost-plus pricing and applies a markup percentage of 60%, what is the sales price per suit? a. $333 b. $320 c. $280 d. $500