Exercise 4-42 (Algo) Target Costing and Pricing (LO 4-3) Sid's Skins makes a variety of covers for electronic organizers and portable music players. The company's designers have discovered a market for a new clear plastic covering with college logos for a popular music player. Market research indicates that a cover like this would sell well in the market priced at $22.50. Sid's desires an operating profit of 25 percent of costs. Required: What is the highest acceptable manufacturing cost for which Sid's would be willing to produce the cover? (Round your answer to 2 decimal places.) Required information Exercise 4-47 and 4-48 (Algo) (LO 4-4) [The following information applies to the questions displayed below.] Mel's Meals 2 Go purchases cookies that it includes in the 10,000 box lunches it prepares and sells annually. Mel's kitchen and adjoining meeting room operate at 70 percent of capacity. Mel's purchases the cookies for $0.70 each but is considering making them instead. Mel's can bake each cookie for $0.20 for materials, $0.18 for direct labor, and $0.65 for overhead without increasing its capacity. The $0.65 for overhead includes an allocation of $0.40 per cookie for fixed overhead. However, total fixed overhead for the company would not increase if Mel's makes the cookies. Mel himself has come to you for advice. "It would cost me $1.03 to make the cookies, but only $0.70 to buy. Should I continue buying them?" Materials and labor are variable costs, but variable overhead would be only $0.25 per cookie. Two cookies are put into every lunch. Exercise 4-47 (Algo) Make-or-Buy Decisions (LO 4-4) Required: a. Prepare a schedule to show the differential costs per cookie. (Enter your answers to 2 decimal places. Select option "higher" or "lower", keeping Status Quo as the base. Select "none" if there is no effect.) b. Should Mel continue to buy the cookies? Yes No