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Current Attempt in Progress A new product is being designed by an engineering team at Cato Security. Several managers and employees from the cost accounting
Current Attempt in Progress A new product is being designed by an engineering team at Cato Security. Several managers and employees from the cost accounting department and the marketing department are also on the team to evaluate the product and determine the cost using a target costing methodology. An analysis of similar products on the market suggests a price of $460 per unit. The company requires a profit of 20 percent of selling price. What is the target cost per unit? (Round answer to 2 decimal places, e.g. 15.25.) Target cost per unit Question 6 of 6 -/1 View Policies Current Attempt in Progress Runner Conference Solutions specializes in the design and installation of meeting and conference centers for large corporations. When bidding on jobs, the company estimates product cost and direct labor for installers and marks up the total cost by 35 percent On a recent job for Pharoah Industries, the company set its price as follows: Product costs including podiums, seating, lighting, etc. $178,000 Installer salaries 201.200 Markup at 35 percent 70,420 Bid price $271,620 23,200 Total The job turned out to be a big hassle. Pharoah requested 26 change orders, although the dollar value of the products it requested changed very little. The company also returned 35 items that had extremely minor flaws (scratches that were barely visible and would be expected in normal shipping)Pharoah also requested seven meetings with designers taking 36 hours before its plan was finalized. Normally, only two or three meetings are necessary Jennifer Davis, controller for Runner, decided to conduct a customer profitability analysis to determine the profitability of Pharoah. She grouped support costs into three categories with the following drivers: Driver Annual Value of Driver Annual Cost Change orders 820 change orders $200,080 Number of returns 990 product returns 74,250 Design meeting hours 1,220 meeting hours 76,860 Calculate the indirect service costs related to the job performed for Pharoah Industries. Change orders $ Returns Design hours Total $
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