Country Daisy is considering the production of a new line of boots. Based on preliminary market research, management believes that each pair

of boots should be priced at $$200$ and managment desires a profit margin of $25\%$ of sales revenue. What is the target cost?

Do not use the dollar sign $($$$)$ in your answer.

QUESTION $13$

Midway makes a component for the aviation industry that has a unit contribution margin of $$125.$ A major customer, West Wings, has been

purchasing $500$ units per month from Midway for many years, but has indicated that it would prefer to purchase them already machined to its

specifications. West Wings has offered to pay an additional $$250$ per unit for the finished units. To meet those specifications, Hayley would have

to rent additional equipment at a cost of $$10,000$ per month and incur addtional labor and other direct costs of $$80$ per unit.

Calculate the advantage or disadvantage of further processing for Midway.Midway makes a component for the aviation industry that has a unit contribution margin of $$125.$ A major customer, West Wings, has been

purchasing $500$ units per month from Midway for many years, but has indicated that it would prefer to purchase them already machined to its

specifications. West Wings has offered to pay an additional $$250$ per unit for the finished units. To meet those specifications, Hayley would have

to rent additional equipment at a cost of $$10,000$ per month and incur addtional labor and other direct costs of $$80$ per unit.

Calculate the advantage or disadvantage of further processing for Midway.