After conducting a market research study, JKL Corporation 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 $240. The annual target sales volume for interior doors is 20,000. JKL has target operating income of 20% of sales.

What is the target cost?

		$960,000
		$4,800,000
		$5,760,000
		$3,840,000

Which of the following would be relevant in the decision to sell or throw out obsolete inventory?

	Direct material cost assigned to the inventory	Fixed overhead cost assigned to the inventory
A)	Yes	Yes
B)	Yes	No
C)	No	Yes
D)	No	No

A.Choice D

B.ChoiceB

C.choice A

D.choiceC