E4-19 Calculating Target Cost [LO 4-8] Majesty Company uses target costing to ensure that its products are profitable. Assume Majesty is planning to introduce a new product with the following estimates

Estimated market price

$

1,200

Annual demand

100,000

units

Life cycle

5

years

Target profit

30

% return on sales

Required :
1.	Compute the target cost of this product.
	target cost _______________?

	Compute the target cost if Majesty wants a 40 percent return on sales.
	target cost _______________?

3.	Compute the target cost if Majesty wants a 15 percent return on sales.
	target cost _______________?