chapter 5

Adams Cameras, Inc. manufactures two models of cameras. Model ZM has a zoom lens. Model DS has a fixed lens. Adams uses an activity-based costing system. The following are the relevant cost data for the previous month: Adams's facility has the capacity to operate 4.500 machine hours per month. Required o. Compute the cost per unit for each product b. The current market price for products comparable to Model ZM is $135 and for DS is $88. If Adams sold all of its products at the market prices, what was its profit or loss for the previous month? c. A market expeit believes that Adams can sell as many cameras as it can produce by pricing Model ZM at \$130 and Model DS at \$45. Adams would like to use those estimates as its target prices and have a profit margin of 30 percent of target prices. What is the target cost for each product