Question
Cougar Fabricators still has the same costs outlined in 1- Life Cycle Pricing but now wants to the determine the selling price using Target pricing.
Cougar Fabricators still has the same costs outlined in "1- Life Cycle Pricing" but now wants to the determine the selling price using Target pricing. They have set the price at $75,000 per unit and require a minimum 30% return. 1a. Will the product meet their expectations for a 30% return? 1b. what is the exact return at a selling price of $75,000 per unit? 2. Cougar Fabricators wants to plan to give their employees a big bonus at the end of the 2 year cycle but need to hit a 50% return in order to accomplish that goal; (2a) will the $75K target price allow them to hit this goal? Why/Why Not? (2b) what would be the target price with exactly a 50% return? Show your work and calculate everything within excel to see the formulas you use to come up with your answers Note that Return refers to the percentage a company wants left over from the selling price after the company has factored in what it costs to make it. in other words Return % = (Selling price - Cost)/Cost
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