Accounting

Calculating a Target Cost

Yuhu manufactures cell phones and is developing a new model with a feature (aptly named Don't Drink and Dial) that prevents the phone from dialing an owner-defined list of phone numbers between the hours of midnight and 6:00 a.m. The new phone model has a target price of $330. Management requires a 10% profit on new product revenues.

Required:

If required, round to the nearest dollar.

1. Calculate the amount of desired profit.

2. Calculate the target cost.