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6 Required informntion [The following information applies to thre questions displayed below] ert 1 of o For many years, Leno Corporation has used straightforward cost-plus
6 Required informntion [The following information applies to thre questions displayed below] ert 1 of o For many years, Leno Corporation has used straightforward cost-plus pricing system, marking its goods up business to foreian competitors that hae become very aaaressve io th arketolace There c ear to be using 3.84 points target costing. An example of Leno's problem is typified by item no. 8976, which has the following unit-cost characteristics: S se Direct material 10 ovechead Selling and administrative expenses se The going market price for an identical product of comparable quality is $455, which is significantly below what Leno is charging. Which of the two approaches could be aptly labeled price-led costing? Answered!Target Costing 1. 2. What is Leno's current selling price of item no, 8976? Current selling price 3. If Leno used target costing for item no. 8976, what must happen to costs maintain its current rate of profit on sales? By how much? the company desires to meet the market price and its cost by 5. Suppose that by previous cost-cutting drives, costs had already been "pared to the bone" on item no. 8976. What might Leno be forced to do with its markup on cost to remain competitive? By how much? (Do not round intermediate calculations. Round your percentage answer to 2 decimal places (i.e., .1234 should be entered as 12.34).) markup by
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