For many years Manama Corporation has used a straightforward absorption costing approach to cost-plus priong, with a manio percentage of 25% has recently lost considerable business to foreign competitors that have become very aggressive in the marketplace These fems appear to be using target costing. An example of Manama Corporations product no 700, which has the following unit-cost characteristics direct materials, $05: direct labor. 805, manutacturing overhead, 500, and selling and administrative expenses. $40. The going market price for an identical product of identical quality is $200, which is below what Manama Corporation is charging Required a) What is Manama Corporation's selling price for product no 700 under its current absorption costing approach to cost-plus pricing? (2 marks) b) if Manama Corporation used target costing for item no. 700, what should have been its target cost per unit if the company desired to meet market price of $200 and maintain its current rate of profit on sales. (2 mark) for the toolbar, press ALTF10 (PC) or ALT+FN-F10 Ma BIVS Paragraph Arial 1000 75 For many years, Manama Corporation has used a straightforward absorption costing approach to cost-plus pricing, with a markup percentage of 25% has recently lost considerate business to foreign competitors that have become very aggressive in the marketplace. These firms appear to be using target costing An example of Manama Corporation's produd no 700, which has the following unit-cost characteristics direct materials, 585, direct labor, $95; manufacturing overhead $50, and selling and administrative expenses $40. The going market price for an identical product of identical quality is $260, which is below what Manama Corporation is charging Required: a) What is Manama Corporation's selling price for product no. 700 under its current absorption costing approach to cost-plus pricing? (2 marks) b) If Manama Corporation used target costing for item no. 700, what should have been its target cost per unit if the company desired to meet market price of $260 and maintaine of profit on sales. (2 marks) For the toolbar, press ALT+F10 (PC) or ALT+FN+F10 (Mac). For many years Manama Corporation has used a straightforward absorption costing approach to cost-plus priong, with a manio percentage of 25% has recently lost considerable business to foreign competitors that have become very aggressive in the marketplace These fems appear to be using target costing. An example of Manama Corporations product no 700, which has the following unit-cost characteristics direct materials, $05: direct labor. 805, manutacturing overhead, 500, and selling and administrative expenses. $40. The going market price for an identical product of identical quality is $200, which is below what Manama Corporation is charging Required a) What is Manama Corporation's selling price for product no 700 under its current absorption costing approach to cost-plus pricing? (2 marks) b) if Manama Corporation used target costing for item no. 700, what should have been its target cost per unit if the company desired to meet market price of $200 and maintain its current rate of profit on sales. (2 mark) for the toolbar, press ALTF10 (PC) or ALT+FN-F10 Ma BIVS Paragraph Arial 1000 75 For many years, Manama Corporation has used a straightforward absorption costing approach to cost-plus pricing, with a markup percentage of 25% has recently lost considerate business to foreign competitors that have become very aggressive in the marketplace. These firms appear to be using target costing An example of Manama Corporation's produd no 700, which has the following unit-cost characteristics direct materials, 585, direct labor, $95; manufacturing overhead $50, and selling and administrative expenses $40. The going market price for an identical product of identical quality is $260, which is below what Manama Corporation is charging Required: a) What is Manama Corporation's selling price for product no. 700 under its current absorption costing approach to cost-plus pricing? (2 marks) b) If Manama Corporation used target costing for item no. 700, what should have been its target cost per unit if the company desired to meet market price of $260 and maintaine of profit on sales. (2 marks) For the toolbar, press ALT+F10 (PC) or ALT+FN+F10 (Mac)
