Answer: C LO: 3 Type: A Montana produces bicycles in a highly competitive market. During the past year, the company has added a 30% markup on the $250 manufacturing cost for one of its most popular models. A new competitor manufactures a similar model, has established a $300 selling price, and is seriously eroding Montana's market share. Management now desires to use a target- costing approach to remain competitive and is willing to accept a 20% return on sales. If target costing is used, which of the following choices correctly denotes (1) the price that Montana will charge and (2) company's target cost? 49. Selling Price A. $300 B. $300 C. $325 D. $325 E. Some other combination of selling price and target cost. Target Cost $240 S250 $240 $250 Answer: A LO: 5 Type: A, N 455 Chapter 15