After conducting a market research study, Chen Manufacturing decided to produce a new interior door to complement its exterior door line. It is estimated that the new interior door can be sold at a target price of $80. The annual target sales volume for interior doors is 20,000. Chen has a target operating income of 20% of sales.

Required:

What are target sales revenues?

A) $960,000

B) $2,000,000

C) $1,800,000

D) $1,000,000

E) $1,600,000

What is the target operating income?

A) $320,000
B) $360,000
C) $200,000
D) $192,000
E) $400,000
C. What is the target cost per unit ?
A) $800,000
B) $1,280,000
C) $1,440,000
D) $1,600,000
E) $768,000

D. What is the target cost for each interior door?
A) $64
B) $72
C) $80
D) $38
E) $40