#6 deals with the product design problems we worked on in Chapter 8. This homework also adds an impact of supply management problem, similar to the ones we worked on in the Supply Management topic (Week 3). Therefore, you may want to review your Supply Management notes and Homework #3 before starting on Questions 2 and 3 of this homework. Carolina Coat Factory (CCF) is developing a new exciting coat called the wCoat that has a built in Wi-Fi hotspot. Although the company is still working out the details of the design (e.g. how to wash it), the purchasing and product development teams have come up with three sets of target cost calculations, depending on the final design. The target cost represents COGS in these scenarios. Below are the three numbers for each target cost scenario. Scenario 1: The planned selling price is $60, the desired profit margin is 11%, the marketing costs are 8%, distribution costs are 10% of selling price. Overhead is $5.00. Scenario 2: The planned selling price is $90, the desired profit margin is 30%, the marketing costs are 10%, distribution costs are 10% of selling price. Overhead is $6.00. Scenario 3: The planned selling price is $95, the desired profit margin is 10%, the marketing costs are 18%, distribution costs are 12% of selling price. Overhead is $10.00. Question 1: Calculate the target cost of each of the three scenarios. CCF believes in can reduce costs and improve profits by lowering its COGS. They have presented you with the following information (Table 1) for Q1 2020. Using this information in Table 1, answer questions 2a, 2b, 3a, and 3b. Sales $25,000,000 COGS $18,100,000 Net Profit $1,425,000