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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:

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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: $2,700 Estimated market price Annual demand Life cycle Target profit 93,000 units 6 years 29% return on sales 1. Compute the target cost of this product. Target Cost 2. Compute the target cost if Majesty wants a 38 percent return on sales. Target Cost 3. Compute the target cost if Majesty wants a 9 percent return on sales. Target Cost

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