Home (Chap 13, 14, 1718) Question 9 Not complete Marked out of Sas Target costing The marketing department at Cleveland Furniture Mfg, has an idea for a new product that is expected to have a six-year life cycle. After conducting market research, the company found that the product could sell for $800 per unit in the first four years of life and for $650 per unit for the last two years. Unit sales are expected to be as follows: Year 1 3,720 Year 2 3348 Year 3 4,371 Year 4 4,650 Year 5 1,395 Year 6 930 Per-unit variable selling costs are estimated at $140 throughout the product's life; total fixed selling and administrative costs over the six years are expected to be $3,700,000. Cleveland Furniture Mfg. desires a profit margin of 15 percent of selling price per unit a. Compute the life cycle target cost to manufacture the product. (Round to the nearest cent Note: Round your answer to two decimal places (ie., round $2.4555 to $2.46) per unit b. If the company expects the product to cost $430 to manufacture in the first year, what is the upper bound for manufacturing cost in the following five years? Note: Round your answer to two decimal places (ie., round $2.4555 to $2.46) per unit